A recent report from S&P Global Market Intelligence noted that large banks had more exposure to CRE loan risk than had been publicly perceived.
This has been a recognition building over time. In November 2023, it looked as though small banks were increasing their number of CRE loans while large banks turned more cautious. And all the statistics and monitoring metrics seemed to show that the biggest concentration of CRE loans was among small and regional banks.
But by mid-May this year, clearly something wasn't adding up. Distress levels jumped while the extend-and-pretend practice of lenders continued. That certainly included large ones when the distress rate increase "was significantly affected by one large loan which impacted the segment distress rate in a fairly dramatic fashion," according to CRED iQ. That magnitude of transaction is not one within the capacity of a small bank.
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.
