Big U.S. Banks’ Government-Backed MBS Holdings Hit Record High

(Bloomberg) -- The largest U.S. banks increased their holdings of federally-backed mortgage securities by about $7 billion during the first week of February, raising their total stake to a record 15.8% of their combined assets, figures from the Federal Reserve show.

Across all banks in the U.S., total assets fell by 0.3% to $20.6 trillion in the week ended Feb. 3, according to the Fed.

• The share of safe assets -- virtually riskless investments such as cash, Treasuries, and securities effectively guaranteed by the U.S. government -- dropped to 34.3% from 34.5%.
• Loans and leases were little changed at 50.2% of total assets.
• As a percentage of deposits, loans and leases fell to 63.4% -- a record low.
• As a percentage of total assets, Treasuries and agency securities were the highest since Dec. 14, 1994.

The Fed also reported the assets of large, small and foreign-related U.S. lenders. Here’s how their balance sheets compare on selected parameters:

• At the 25 biggest U.S. banks, total assets fell 0.2% to $11.99 trillion.
• Loans and leases as a percentage of deposits hit an all-time low.

Here’s how big banks’ balance sheets have changed since the Fed’s previous weekly report:

• The total assets of smaller and foreign-related banks dropped 0.5% to $8.57 trillion.
• As a percentage of total assets, small and foreign-related banks’ holdings of Treasuries and agency securities were the highest since Sept. 25, 2019.
• Loans and leases as a percentage of deposits were the lowest since Sept. 02, 2015.

Here’s how smaller and foreign-related banks’ balance sheets have changed since the previous report:

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