KBRA Publishes Financial Institutions Research: “Late-in-the-Cycle Perspectives on Bank Performance”

NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases a new research report entitled, “Late-in-the-Cycle Perspectives on Bank Performance.” The report makes the following key points:

  • Rising loan losses, largely taking place in non-mortgage consumer categories, are clearly manageable in the context of relatively high loan yields and reflect a healthy loosening of what were too tight loan underwriting standards post crisis.
  • Commercial real estate risk in the banking system, especially construction lending, has been reduced post crisis, primarily through regulatory directive; significant risk concentrations in commercial mortgages at certain community banks, however, is worth watching closely.
  • Earnings power, while reduced throughout the industry post crisis from unsustainably high levels pre-crisis, remains sound as normalizing credit costs figure to be largely absorbed by the benefit of higher rates.
  • Continued consolidation among U.S. banks is a positive trend for bank creditworthiness as the benefits of increased scale, reduced competition, and greater spread of risk more than offset integration issues.

To view the report, please click here.

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Van B. Hesser, Senior Managing Director
(646) 731-2305
vhesser@kbra.com
or
Joe Scott, Managing Director
(646) 731-2438
jscott@kbra.com
or
Ian Jaffe, Senior Director
(646) 731-3302
ijaffe@kbra.com

Contacts

Kroll Bond Rating Agency
Analytical Contacts:
Van B. Hesser, Senior Managing Director
(646) 731-2305
vhesser@kbra.com
or
Joe Scott, Managing Director
(646) 731-2438
jscott@kbra.com
or
Ian Jaffe, Senior Director
(646) 731-3302
ijaffe@kbra.com