Episode Details

As the consternation on Wall Street around the Private Credit market continues, we examine bank lending to NDFIs. This has been banks largest and fastest-growing loan segment since 2010. The compound growth rate from 2010 to 2024 is 21.9%, almost three times as high as the next segment, which is multifamily CRE. NDFI lending has increased from $56B in 2010 to $1.32 trillion in 2025! NDFI lending as a percentage of Tier 1 capital rose from 4.1% in 2010 to 52.3% in 2025. The largest financial institutions have the highest concentration of NDFI loans. Starting in December of 2024, the Call Report filings were changed to require additional reporting on NDFI lending. These changes include the addition of five subcategories. Lending to NDFIs poses substantial risk to banks as the credit decisions, credit administration, and collateral valuations fall outside the direct control of Banks (Ex: Tricolor Holdings and First Brands). This episode reviews the FDIC report on bank lending to Nondepository Financial Institutions and an article from S&P Global (subscription required) titled “US banks’ NDFI lending pace reaccelerates in Q4 2025.” A link to the FDIC report is included below.  

Link: Bank Lending to Nondepository Financial Institutions