State of the Banks

CRE Finance World, Summer 2013

State of the Banks A publication of Summer issue 2013 sponsored by CRE Finance World Summer 2013 31 ith few exceptions, the US banking system entered 2013 in its strongest position since before the financial crisis. Higher revenues and narrowing legacy costs pushed industry-wide net income for 2012 to its best levels in six years, less than $4 billion short of its all-time high. The marked improvement in the health of our banks is largely attributable to a sharp decline in loss provisions, which have fallen roughly 80% since peaking at nearly $250 billion in 2009. While new lending to commercial real estate has been measured, indications of banks’ newfound resilience are broad-based. Well over half of all institutions reported higher year-over-year net income in the fourth quarter. Only 14% reported a net loss. Figure 1 Net Income ($M) Figure 2 Loss Provisions Figure 3 Net Loss on Sales of REO W Sam Chandan PhD Chandan Economics and the Wharton School


CRE Finance World, Summer 2013
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