In fact, as you can see many are rated 5-Stars or 4-Stars by Bauer, which examines the complete financial picture and history of the institution.
This DOES NOT mean the banks are in trouble. At least 2.25% of those CRE loans are 90 days or more past due.CRE loans increased by a minimum of 10% during the 12 months ending Septemand.Commercial real estate (CRE) loans represent at least 25% of total loans.
The 53 banks listed on page 7 have three things in common: We will continue with other categories in coming issues. While these factors do not automatically translate to impending problems, they must be monitored.ĭue to the surplus in multi-family and industrial properties, not to mention that of retail ( JRN 36:30), CRE seems a good place to begin after the shopping season finished. Specifically, banks with high concentrations, high growth and high levels of bad CRE loans. That's why it helps to have an unbiased, independent, third party to be on the constant lookout for cracks. In fact, we already see similar complacency setting in today that preceded those events. The second crisis also highlighted the extremely short memory of the American public. These events had three things in common: greed, inadequate supervision and severe myopia. (During the Savings and Loan crisis of the 1980s, more than 1,600 banks were shuttered and during more recent Recession, we lost another 500.) In more dire cases, hundreds of banks are harmed, or closed. In ordinary circumstances, these exceptions affect one institution that has made some bad decisions. However, as we know all too well, there are exceptions. For the most part, these internal policies and procedures are sufficient to keep problems at bay. They must also establish sufficient loan loss allowances and conduct periodic reviews to identify problem assets. While most banks hold a portion of CRE loans, too much CRE concentration (or of any concentration) could put a bank at risk in a market downturn.Įach bank has its own written policy relating to diversification and underwriting standards. It currently stands just shy of $1.5 trillion. The largest subcategory of CRE, non-farm, non-residential real estate, was up 4.6% at the nation's banks during the 12 month period ending. Today, topping $2.4 trillion, CRE loans at U.S. Commercial Real Estate: the Next Challenge?Īfter considerable contraction after the 2008 crisis, Commercial Real Estate (CRE) lending began growing again in earnest in 2013, then began to slow down again in 2015.
0 kommentar(er)
