Fitch: Banks face more difficult credit trends amid exposure to commercial real estate losses
By APFriday, August 21, 2009
Fitch: Banks face more difficult credit trends
NEW YORK — Fitch Ratings analysts said Friday they expect U.S. banking companies to continue to face rising credit costs and a difficult operating environment in the coming months.
Fitch said negative credit trends will continue in part because of increasing concerns regarding exposure to commercial real estate losses.
Earnings capacity and ability to absorb higher credit costs is being eroded by narrowing margins, causing declines in spread income, the analysts said.
“Fitch is highly concerned with the prospect of significant deterioration in commercial real estate, likely an escalating contributor to credit problems in 2009-2010,” analysts said in a statement.
Fitch analysts have launched an expanded review of U.S. bank commercial real estate exposures and they are gathering more uniform and detailed information on the commercial real estate portfolio of the major banks they rate.
