Kroll Bond Rating Agency: Bank Construction Lending on the Rise

NEW YORK--()--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.

Follow us on Twitter!
@KrollBondRating

About Kroll Bond Rating Agency

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).

Contacts

Analytical Contacts:
Kroll Bond Rating Agency
Joe Scott, 646-731-2438
Managing Director
jscott@kbra.com
or
Chris Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com

Contacts

Analytical Contacts:
Kroll Bond Rating Agency
Joe Scott, 646-731-2438
Managing Director
jscott@kbra.com
or
Chris Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com