2019 was a challenging year for commercial lending. Predictions of a rebound in C&I loan growth failed to materialize for reasons ranging from recession worries to trade tensions to labor shortages. Compounding the problem, the Fed cut interest rates three times, placing downward pressure on bank net interest margins. Fortunately, commercial loan credit quality is holding steady. In 4Q19, the percentage of C&I loans risk rated classified and criticized were only slightly higher than the historical low watermarks, although some sectors – such as Retail Trade – are beginning to show signs of weakness. For Commercial Real Estate loans, problem loan levels were also low and stable as of the most recent quarter.
Thank you for your interest in the Credit Risk Benchmarks 4Q19 Newsletter. This issue can be downloaded below.
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Automated Financial Systems, Inc. (AFS) 79 chaussée de Charleroi, 3e et 4e étage, 1060 Bruxelles, Belgium Phone: +1 484 875 1545
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