JP Morgan's CEO says Real Estate losses will further shake Small Banks

Genevieve Roch-Decter, CFA

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Jamie Dimon, the CEO of JP Morgan Chase, just said that commercial real estate losses may take a few banks down Here’s what you should know about the next banking crisis:

Genevieve Roch-Decter, CFA

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Regional banks have another huge problem besides bank runs: Commercial real estate loans. Over $1.5 trillion in commercial real estate loans will come due over the next 2.5 years x.com/GRDecter/statu…

Genevieve Roch-Decter, CFA

@GRDecter

Lenders are tightening their standards When $1.5 trillion in commercial loans come due over the next 2 years, many will struggle to refinance This is a crisis in the making

Genevieve Roch-Decter, CFA

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The peak in delinquencies from the 2008 crisis was about 3 years after the crisis began. Meaning we can expect things to get worse before they get better

Genevieve Roch-Decter, CFA

@GRDecter

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How exposed are regional banks? You can spot a few of the banks that are in big trouble now on this list, like PacWest and Western Alliance:

Genevieve Roch-Decter, CFA

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The big question is: How bad will delinquencies get? So far, not that bad. According to the Fed, the delinquency rate on commercial real estate loans was just 0.68% at the end of Q4 of 2022. That’s far below the peak of 8.92% in 2010. But...