AI Boom Drives a Jump in Lending, but Bankers Still Sound Cautious

A facts-only brief, written by a local AI model from this article in The Wall Street Journal, October 28, 2026. It may contain mistakes, and it is not the article: the full story is at wsj.com.

Banks reported significant growth in commercial-and-industrial lending during the third quarter, driven primarily by the construction of artificial intelligence data centers. Federal Reserve data indicates that loans at the 25 largest U.S. banks increased by nearly 10% year-over-year, marking the fastest growth rate in over a decade. Despite this expansion, bank stocks have underperformed the broader market, with the KBW Nasdaq Bank index rising approximately 5% compared to a 13% gain for the S&P 500. Executives at major institutions expressed caution regarding the sustainability of AI spending and the complexity of associated financial risks.

Background

• JPMorgan Chase Chief Financial Officer Jeremy Barnum stated that the bank is closely monitoring capital flows to ensure no risks are overlooked amidst the AI innovation surge.
• Wells Fargo Chief Financial Officer Mike Santomassimo emphasized strict limits on exposure, noting the need to understand layered risks such as lessees and guarantees in data-center projects.
• Citizens Financial executives reported that most of their exposure is limited to data centers leased to hyperscalers with committed power and regulatory approvals, while also hedging some positions.
• Regional bank leaders, including those at KeyCorp and Fifth Third Bancorp, noted that while they lend to construction firms rather than data-center sponsors, a slowdown in AI capital expenditure could still negatively impact their loan growth.

Read the full article at wsj.com

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