Are the Largest U.S. Banks Prepared for Stress in Their Office Loan Portfolios?
After the collapse of three U.S. banks in less than a week's time in March, the banking sector has found itself under a microscope. Problems that were being ignored by investors or that the market elected to kick down the road are now front and center.
In addition to deposit outflows and unrealized bond losses, two issues that ultimately led to the downfall of SVB Financial, investors are now taking a very hard look at commercial real estate (CRE), which many believe could be another looming issue. Embedded within CRE are office loans, which are an even more worrying loan segment. This is because of the popularity of working from home, which exploded after the onset of the pandemic and is a trend that does not look to be going away anytime soon.
Let's take a look at some of the largest CRE lenders in the U.S. and whether they are prepared for the incoming stress to their office loan portfolios.
Source Fool.com