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Visualizing Major U.S. Banks by Commercial Real Estate Exposure

This is a syndicated repost published with the permission of Visual Capitalist. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

U.S. Banks by Commercial Real Estate Exposure

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The six largest U.S. banks saw delinquent commercial property loans nearly triple to $9.3 billion in 2023 amid high vacancy rates and increasing borrowing costs.

Today, the sector is facing greater scrutiny from regulators amid growing risks to bank stability. In fact, for almost half of all U.S. banks, commercial real estate debt is the largest loan category overall. While commercial loans are more heavily concentrated in small U.S. banks, several major financial institutions have amassed significant commercial loan portfolios.

The above graphic shows the commercial real estate exposure of the top U.S. banks, based on data from UBS.

Top 20 U.S. Banks by Assets: Commercial Property Exposure

Here are the commercial property loans across the largest U.S. banks by assets as of the third quarter of 2023:

Bank Total Assets Total Loans
and Leases
Total Commercial
Real Estate Loans
Share of
Total Loans
JPMorgan Chase & Co. $3.9T $1.4T $171B 12.6%
Bank of America Corp $3.2T $1.1T $76B 6.9%
Citigroup Inc. $2.2T $945B $37B 4.0%
Wells Fargo & Company $1.9T $684B $145B 21.2%
U.S. Bancorp $668B $378B $56B 14.9%
PNC Financial Services Group, Inc. $557B $319B $49B 15.5%
Truist Financial Corporation $543B $317B $42B 13.3%
Capital One Financial Corp $471B $316B $49B 15.6%
Bank of New York Mellon Corp $405B $66B $7B 10.0%
State Street Corporation $284B $35B $3B 8.8%
Citizens Financial Group, Inc. $226B $132B $31B 23.1%
First Citizens BancShares, Inc. $214B $133B $20B 14.9%
Fifth Third Bancorp $213B $121B $12B 10.0%
M&T Bank Corporation $209B $99B $40B 40.1%
Keycorp $188B $121B $19B 16.0%
Huntington Bancshares Incorporated $187B $44B $14B 33.2%
Regions Financial Corporation $154B $151B $17B 11.5%
Northern Trust Corporation $146B $117B $6B 4.7%
New York Community Bancorp Inc $111B $86B $49B 57.0%
Zions Bancorporation, N.A. $87B $51B $15B 29.3%

As the above table shows, JPMorgan Chase, America’s largest bank, has 12.6% of its loan portfolio in commercial real estate.

Despite commercial property troubles, the company witnessed record stock prices in 2023, with its share price increasing 27% over the year. The bank acquired First Republic at the height of the U.S. regional banking turmoil in 2023, which helped boost performance.

Still, big banks remain cautious. Several major banks, such as Wells Fargo, are building bigger cash reserves for commercial property credit losses as a buffer for potential defaults.

Perhaps the most concerning big bank is New York Community Bancorp, which has 57% of its total loans exposed to commercial property debt. The bank reported a $2.7 billion loss in the fourth quarter of 2023, and Moody’s recently downgraded its credit rating to “junk” status. The bank brought in a $1 billion infusion of capital as a lifeline after growing concerns about the state of its commercial real estate loan portfolio.

Overall, while pockets of trouble are surfacing, major banks are more insulated from commercial property shocks compared to other banks. On average, about 11% of big banks loan portfolios are concentrated in commercial real estate compared to small banks, where average exposure falls around 21.6% of loans.

The post Visualizing Major U.S. Banks by Commercial Real Estate Exposure appeared first on Visual Capitalist.

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