Over the five years to 2017, the Industrial Banks industry has repeatedly claimed to be burdened by regulatory impediments. Although the industry performed stronger than the overall banking sector over the five-year period, due to its higher-quality loan portfolio, acquisitions and troubled parent companies caused the number of industry participants to decline. The industry's core business grew over the five years to 2017. With growth beginning in 2012, industry revenue reversed its recessionary course and turned toward recovery. With the FDIC lifting the ban on industrial banks after favorable reports on industry conditions, conditions for new entrants returning to the industry over the five years to 2022 are expected to improve. However, harsh regulatory conditions will likely persist, discouraging some new entrants. Nonetheless, normalizing interest rates are expected to encourage new charter applications, resulting in an increase in banks over the next five years. IBISWorld estimates that a slow annualized rise in the number of industrial banks, coupled with improving consumer spending and loan demand, will cause industry revenue to rise at a higher rate over the five years to 2022.
Industrial banks, also known as industrial loan companies, are financial institutions authorized to make consumer and commercial loans and to accept federally insured deposits. Either financial or commercial operators can own these types of banks. The Federal Reserve does not regulate industrial banks under the Bank Holding Act; instead, the state under which they are charted and the Federal Deposit Insurance Corporation regulates them.
This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.