Index of Banking Activity update

Date: June 22, 2020

Following four months of slow but steady growth, the Index of Banking Activity (IBA) Composite Index fell three points in January, to 53.8 from December’s reading of 56.8. The 2.2% decline brings the Composite Index to its lowest level since American Banker began compiling the Index last summer in collaboration with VantageScore Solutions. The previous low of 53.9 was recorded in July 2012.

Among the Composite Index’s 16 underlying component measures, the January downturn was driven in part by declines of just over 5% in approvals of both consumer and commercial loans, and upticks, also of roughly 5% each, in commercial- and consumer-loan delinquencies.

Note that the IBA Composite is a diffusion index, for which values greater than 50 indicate market expansion, and those below 50 indicate contraction. So while its growth has cooled, the Composite Index still indicates general, if modest, growth among financial institutions.

Source: American Banker and VantageScore Solutions, LLC

Compiled from surveys of executives at hundreds of financial institutions across the U.S., the Index of Banking Activity is an industry bellwether that tracks business indicators such as volume of deposits, loan applications and loan delinquencies, and how they change month over month. Measurements for each component are combined to create the Composite Index. You can find more information about the index and its component measurements on our website, VantageScore.com.

As the IBA continues into 2013, VantageScore Solutions will continue tracking its progress and monitoring its component measurements for insight into the state of the nation’s financial institutions.