Through the past few weeks, bank earnings and American Express’ latest results point to a commercial lending environment where demand is muted in real estate, stronger in other sectors — and marked by strong credit quality.
And though the snapshot of the quarter showed pockets of demand for the capital to keep operations humming, and even expanding, at least some of the activity was focused on getting “ahead” of tariffs, sourcing supply and inventory, and right now many of those firms are in a “wait and see” mode while tariffs play out on the wider world stage.
Getting Ahead of Tariffs, and Using Corporate Cards to Do So
American Express indicated last week that, in the words of CFO Christophe Le Caillec, “SME spending at wholesale merchants saw a modest acceleration in growth over the quarter, possibly reflecting higher purchases in advance of potential price increases. International card services spend was up 14%. This strong growth was seen across geographies with each of our top five markets growing by double digits.”
The earnings presentation materials indicated that overall spending on the firm’s commercial cards was up 2%, down from the 4% gains in the fourth quarter. Overall small and medium-size enterprise (SME) spending was 2% higher in the first quarter, and as SMEs are 81% of the firm’s commercial services, as “main street” firms go, so goes Amex’s corporate unit. Corporate net write-offs were steady at 0.5%
Healthy Spending on Cards
In Citi’s filings, the company noted that its commercial card spending volumes were up 2% year over year to $17 billion, and that loans in its treasury and trade solutions business gained 6% to $85 billion. Corporate loans at the end of the March period stood at $316 billion, up from $301 billion at the end of last year. NCLs were basically flat, and deposits were up by 1% to $841 billion.
CFO Mark Mason said that “the loan growth … [was] in average interest-earning balances on the Branded Cards side, but also saw trade loan growth as well. And so those are going to be important tailwinds as I think about the balance of the quarter.” CEO Jane Fraser said that “we are positioned to be the go-to bank for commercial clients. So, these are ones with cross-border needs. We’ve got these unique capabilities that, particularly the born-digital clients who are then going global very quickly, they can just sit on top of our existing capabilities in Services.”
In JPMorgan’s latest results, business banking average loans were flat to $19.5 billion in the latest quarter. Origination activity slowed, to $800 million in the latest quarter, down from $1 billion in the fourth quarter of last year.
And in tandem with reduced activity, commercial banking revenues were $2.8 billion in the latest quarter, down slightly from a year ago, tied to commercial real estate. Middle market banking revenues were just under $2 billion, down very slightly from the fourth quarter and up $29 million from a year ago. Credit quality remained strong, as net charge-offs in the latest quarter, at 0.15%, were better than the 0.25% seen in the fourth quarter of last year.
But a net reserve build of $528 million served as a nod to the fact that the economic environment is volatile.
CFO Jeremy Barnum said on the conference call with analysts that “in terms of our corporate clients, obviously, they’ve been reacting to the changes in tariff policy. And at the margin that shifts their focus away from more strategic priorities with obvious implications for the Investment Banking pipeline outlook towards more short-term work, optimizing supply chains and trying to figure out how they’re going to respond to the current environment. So, as a result, I think we would characterize what we’re hearing from our corporate clients is a little bit of a wait-and-see attitude. I do think you see obvious differences across sectors.
“Some sectors are going to be much more exposed than others and have more complicated problems to solve, and also across the size of the clients, I think, smaller clients, small business and smaller corporates are probably a little bit more challenged. I think the larger corporates have a bit more experience dealing with these things and more resources to manage,” he said. “So, that’s a little bit of our read of the situation right now, but certainly a bit of a wait-and-see attitude. It’s hard to make long-term decisions right now.”
In Bank of America’s corporate book, U.S. commercial loans grew in the March quarter, to $412 billion, up from $405 billion in the fourth quarter of last year and ahead of the $380 billion seen a year ago. Commercial net charge-offs of $333 million decreased $26 million. The net charge-off ratio of 0.54% was flat from the end of the year.
CEO Brian Moynihan said during the call that “we’re the largest small business lender in the United States. By quite a bit. And those loans are growing.”
Wells Fargo CFO Mike Santomassimo indicated to analysts that “in the commercial bank, it was mostly a utilization story. There may have been a few new customers as well where we saw kind of a slight uptick there in utilization, mostly in kind of the bigger client segment, so the mid-corporate segment, not the smaller clients in the commercial bank. We also saw some upticks in our asset-based lending portfolio as well … we haven’t really seen any evidence of people prepositioning significantly that caused significant borrowing at least as it relates to their expectations around tariffs.”
Both average and period-end loans grew slightly from the fourth quarter, driven by growth in commercial and industrial loans. The company’s latest filings detailed that commercial loans were $533.2 billion, up from $528.3 billion in the final quarter of 2025.
