Smaller CRE-concentrated banks are more susceptible to elevated losses from deteriorating credit in the commercial real estate market once stimulus measures wind down and forbearance programs expire, Fitch Ratings warned Tuesday.
"There has been a very high correlation historically between U.S. bank failures and exposure to CRE lending," Fitch said.
However, the CRE losses are expected to peak below levels seen in the past, mitigated by an improving macroeconomic backdrop, notwithstanding uncertainty around variants and the potential for renewed lockdowns. the ratings service noted.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
