NEW YORK--(BUSINESS WIRE)--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.
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.