NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases comment: Bank Construction Lending on the Rise.
The report makes the following key points:
- In 2016, construction and development (C&D) lending by all U.S. banks was again the most rapidly growing loan category, following outsized growth in 2015.
- Growth in C&D lending remained strong throughout 2016, despite a slowdown in many other lending categories particularly in the second half of the year.
- Given considerable pricing pressures in most loan categories, it is always tempting for bankers to increase C&D lending – a comparatively higher margin, but higher risk loan product.
- The relatively rapid growth in C&D exposure is a concern, but exposure for the industry remains well below pre-2008 financial crisis levels.
- Regulatory scrutiny of C&D and commercial real estate (CRE) exposure appears to have intensified over the last year with regulators reiterating “guidance” on total concentrations.
Please click here to read the report.
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KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).