The IRA Bank Book Q4 2025: Credit Defaults Fall, Market Risk Grows

December 1, 2025 | We have published the latest edition of The IRA Bank Book for Q4 2025. Entitled "Defaults Fall, Market Risk Grows," the report details how indicators of consumer credit risk are falling even as risk to financial markets from institutional and commercial credit, crypto tokens and market exposures grow. Bank income has reached record levels in Q3 2025, but what happens in Q4 2025 and 2026?

The flow of bank loans supporting private equity, credit strategies and crypto offerings continued to grow in Q3 2025, although the rate of increase is naturally slowed as the size of the bubble in non-depository financial institutions (NBFIs) expanded. As in Q2 2025, the largest bank portfolio increases reported by the FDIC are in loans to NBFIs and broker-dealer loans to purchase or carry securities, including margin loans. Many large securities dealers that extend margin credit are affiliates of big banks.

Source: FDIC

The WGA report notes that the market performance for the banks in the WGA Bank Top 50 continues to be strong despite the selloff in early November. SoFi Technology (SOF) leads the pack up 85% YTD as of the end of November. Goldman Sachs (GS), Morgan Stanley (MS) and Citigroup (C) continue to lead the larger group. Lending Club (LC) was #2 behind SOFI at the end of November, the report notes. The top ten bank stocks in the WGA Bank Top 50 as of November 28, 2025, are shown below:

Source: Yahoo Finance

Margin credit in the US reached another new peak in October 2025. While rising margin debt can reflect investor confidence, we see it as a warning sign of excess speculation, potentially increasing market risk for depositories. The selloff in AI stocks and crypto tokens in the first two months of the fourth quarter may result in credit losses to banks and dealers.

Source: FINRA

Copies of The IRA Bank Book for Q4 2025 report are available to subscribers to the Premium Service of The Institutional Risk Analyst. Stand alone copies of the WGA report are also available for purchase in our online store. Media wishing to receive a courtesy copy of the report please email us: info@rcwhalen.com

Premium Service subscribers may download the new report below.

BankBook_Q42025.pdf

Download PDF • 2.11MB

The Institutional Risk Analyst (ISSN 2692-1812) is published by Whalen Global Advisors LLC and is provided for general informational purposes only and is not intended for trading purposes or financial advice. By making use of The Institutional Risk Analyst web site and content, the recipient thereof acknowledges and agrees to our copyright and the matters set forth below in this disclaimer. Whalen Global Advisors LLC makes no representation or warranty (express or implied) regarding the adequacy, accuracy or completeness of any information in The Institutional Risk Analyst. Information contained herein is obtained from public and private sources deemed reliable. Any analysis or statements contained in The Institutional Risk Analyst are preliminary and are not intended to be complete, and such information is qualified in its entirety. Any opinions or estimates contained in The Institutional Risk Analyst represent the judgment of Whalen Global Advisors LLC at this time, and is subject to change without notice. The Institutional Risk Analyst is not an offer to sell, or a solicitation of an offer to buy, any securities or instruments named or described herein. The Institutional Risk Analyst is not intended to provide, and must not be relied on for, accounting, legal, regulatory, tax, business, financial or related advice or investment recommendations. Whalen Global Advisors LLC is not acting as fiduciary or advisor with respect to the information contained herein. You must consult with your own advisors as to the legal, regulatory, tax, business, financial, investment and other aspects of the subjects addressed in The Institutional Risk Analyst. Interested parties are advised to contact Whalen Global Advisors LLC for more information.