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Index of Banking Activity dips amid lower loan pricing

The Index of Banking Activity declined to 57.5 in April, from 60.1 in March, as competition for borrowers put downward pressure on loan prices. The March reading was the highest ever for the composite index, which American Banker began compiling last July in partnership with VantageScore Solutions.

The composite index, which combines 16 separate measures, including pricing on commercial and consumer loans, continues to show ongoing industry expansion, but at a rate somewhat slower than a month ago. April’s component reading on commercial pricing fell nearly two full points, to 35.8 from 37.7 in March.

Source: American Banker and VantageScore Solutions, LLC

Compiled from surveys of executives at hundreds of financial institutions across the United States, the index is an industry bellwether that tracks 16 distinct business indicators, such as volume of deposits, loan applications, and loan delinquencies, and how they change month over month. Measurements of each of these components are combined into a single Composite Index, in which readings above 50 indicate business expansion, and those below 50 signify contraction. Find more information about the Index and its component measurements at AmericanBanker.com.

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