Despite a surge of refinancings because of ultralow interest rates, lending declined nearly 6 percent as fewer consumers sought credit.
But the reduction of old loans outweighed the new ones: despite £215 billion in new loans, net lending declined again.
For example, from 2003 through 2008, core retail bank checking accounts grew by 58 percent while residential first-mortgage lending declined by more than two-thirds.
Despite the fall in interest rates for borrowers, the volume of mortgage lending declined 10.4% in January from the month before, and was 3% lower than January 2012.
From last June to this June, commercial bank lending declined more than 9percentt, according to an analysis of Federal Reserve data by Goldman Sachs.
The increase in reserves is too small, and the bank has failed even to meet this target several times over the past month because, with lending declining, banks do not need extra cash.
REUTERS Lending Declines in Indonesia | After Indonesia's central bank imposed restrictions, bank loans to companies in the first quarter were at the lowest level in a year, Bloomberg News reports.
Yet, the Mortgage Bankers Association reports that multifamily lending declined 40percentt in 2009 from its 2008 levels.
JPMorgan lost $274 million, pre-tax, making mortgage loans, compared with a profit of $789 million a year earlier as margins declined and as the company was unable to reduce expenses as quickly as lending volumes declined.
"Bank lending is declining anyway, and capital expenditures are increasingly financed internally".
