The white-collar remote work revolution could permanently reshape the office market, bankers said. said Michael Morris, chief credit officer at Salt Lake City-based Zions Bancorporation. The bank increased its loan loss reserves by more than 30% year-on-year in the first quarter.
Cleveland-based KeyBank, one of the largest commercial real estate servicers in the U.S., said the bank’s chief executive, Christopher Gorman, said demand for special services, the process of handling problem loans, was “huge.” I’ve seen what I’ve described as “a sharp increase”. Gorman said his office projects recently overtook retail buildings as the largest category of special services financing.
A credit crisis could plunge the economy into recession and hurt bank profits.
Banks are tightening lending standards, but they see the changes as minor adjustments and not a major setback.
Darren J. King, Chief Financial Officer of Buffalo-based M&T Bank, said:
Still, smaller banks are bracing for a recession, echoing the warnings being issued by the leaders of big banks. Bruce Van Thorne, chief executive of Citizens Financial Group, based in Providence, Rhode Island, said his bank was adjusting its lending decisions for the possibility of a “short and shallow recession.” said that His Truist, the seventh-largest U.S. bank headquartered in Charlotte, North Carolina, said the bank’s chief financial officer, Michael Maguire, has been critical of extending credit in what he called an “increased risk environment.” He said he was being more cautious.
