US regional banking shares tumble for second straight day
NII, COMMERCIAL REAL ESTATE PRESSURES
Investors and analysts have warned that banks paying out higher interest rates on deposits would see an erosion in their NII - the difference between what lenders earn on loans and pay on deposits.
During the first-quarter earnings, many regional banks also said that NII was waning.
Another potential headache for banks is their exposure to the troubled commercial real estate (CRE) sector, which has been under pressure due to high borrowing costs and remote working.
NYCB's loss for the fourth quarter was driven by a $552 million provision for credit losses, the lion's share of which was allocated to its CRE portfolio.
Some investors are expecting "the regional bank index to continue its recovery in 2024," said Rick Meckler, partner at Cherry Lane Investments, but Wednesday's moves were a suggestion that it may not be a straight line recovery.
"Individual regional banks will need to begin to show more positive results in what investors presume will be a non-recessionary and lower interest rate environment," Meckler added.
Meanwhile, on Thursday, Japan's Aozora Bank flagged its first annual net loss in 15 years as it set aside massive loan-loss provisions for U.S. commercial property.
https://www.investing.com/news/econo...-slide-3289333
NII, COMMERCIAL REAL ESTATE PRESSURES
Investors and analysts have warned that banks paying out higher interest rates on deposits would see an erosion in their NII - the difference between what lenders earn on loans and pay on deposits.
During the first-quarter earnings, many regional banks also said that NII was waning.
Another potential headache for banks is their exposure to the troubled commercial real estate (CRE) sector, which has been under pressure due to high borrowing costs and remote working.
NYCB's loss for the fourth quarter was driven by a $552 million provision for credit losses, the lion's share of which was allocated to its CRE portfolio.
Some investors are expecting "the regional bank index to continue its recovery in 2024," said Rick Meckler, partner at Cherry Lane Investments, but Wednesday's moves were a suggestion that it may not be a straight line recovery.
"Individual regional banks will need to begin to show more positive results in what investors presume will be a non-recessionary and lower interest rate environment," Meckler added.
Meanwhile, on Thursday, Japan's Aozora Bank flagged its first annual net loss in 15 years as it set aside massive loan-loss provisions for U.S. commercial property.
https://www.investing.com/news/econo...-slide-3289333
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