Harry Terris

Stress, particularly in the office sector, continues work its way through banks, which have put the brakes on commercial real estate lending.

Stress, particularly in the office sector, continues work its way through banks, which have put the brakes on commercial real estate lending.

Bank guidance on loan growth has been subdued, with executives saying that borrowers are waiting on lower interest rates.

Loan yields declined sequentially across banks in the aggregate during the first quarter as higher-for-longer rates have presented challenges for loan portfolio mix and derivatives positions.

Delinquencies across US banks were nearly flat sequentially, and year-over-year growth slowed for the second consecutive quarter.

Consensus forecasts anticipate more net interest income pressure offset by lower credit provisions as the rates picture shifts abruptly once again.

Allowance ratios for commercial real estate loans have jumped by nearly a third over a year, a far larger increase than for other major categories of loans. Banks say they are prepared for coming charge-offs.

Big bank executives said sluggish commercial borrowing has continue into the first quarter of 2024 as clients exercise caution even as recession fears ease.

Pushed-out expectations for rate cuts are keeping borrowers under pressure, but banks continue to express confidence in reserve levels and say that problems remain largely confined to the office sector.

The median bank posted deposit growth in fourth quarter earnings reports, and big banks funneled some of it into bigger securities portfolios.

The median bank posted deposit growth in fourth quarter earnings reports, and big banks funneled some of it into bigger securities portfolios.

Peak credit card loan losses might be coming into view as lenders have tightened standards and reined in growth.

Banks are fighting against the impact of higher interest rates on their capital by restraining stock buybacks and shrinking risk-weighted assets.

The four largest US banks beat analyst estimates for earnings per share, net interest margins and credit provisions as they raised net interest income forecasts for the year.

Among the 15 largest publicly traded US banks, 13 are forecast to post sequential EPS declines, and 14 are projected to post revenue declines.

Loan loss metrics are ticking back up toward pre-pandemic norms, and investors appear focused on risks like a rapid increase in credit card borrowing.

Banks and analysts anticipate a modest impact on earnings, with some banks saying they will replace other forms of high-cost borrowing.

Banks and analysts anticipate a modest impact on earnings, with some banks saying they will replace other forms of high-cost borrowing.

Lenders say households are healthy and they see no cliff for credit quality as bad loans move back up toward pre-pandemic levels.

Persistently high interest rates, driven by a stronger outlook for the US economy, are keeping the pressure on the fair value of bank assets accumulated when yields were low.