Moody’s: Continued Concerns About Banks with Outsized CRE Concentrations
filed in Daily Buzz News on Feb.07, 2010
Research Recap submits:
But despite elevated losses from commercial real estate loans, Moody’s does not expect to make system-wide rating downgrades.
Moody’s estimates that rated U.S. banks hold 50% of total CRE loans and will incur CRE losses of $120 billion from 2008 through 2011. This sum represents a loss rate of approximately 17% on the banks’ year-end 2007 CRE loan balances. For both rated and unrated banks, total remaining losses on CRE lending may well exceed $150 billion.