🏡📉 The Real Estate crisis looms over banks

🚨 During the last few days, investors have been focusing on the regional banking sector, which seems to be facing new difficulties. In particular, New York Community Bancorp fell 42% after announcing a loss and a dividend cut. As a result, the index tracking the performance of regional banks fell by 5.7%. The bank had previously acquired part of the assets of Signature Bank, one of the institutions affected by the sudden rise in interest rates. New York Community Bancorp also reported a fourth-quarter loss of $260 million and a loan loss provision of $552 million.

👉 However, the problems are not limited to American banks. Tokyo’s Aozora Bank lost over 30% following the announcement of a loss on commercial real estate investments in the United States. In Europe, Deutsche Bank significantly increased its provisions for losses on US real estate to 123 million euros ($133 million) in the fourth quarter, four times more than last year.

🚩 Overall, banks will face commercial real estate loan maturities of around $560 billion by the end of 2025, more than half of the total debt maturing over this period. Regional banks are more vulnerable in this area and could be more negatively affected than larger banks.

Source: Bloomberg