Assessing CRE Credit Risk in Bank Loan Portfolios Globally: Better Disclosures Would be Applauded
DBRS, Inc. (DBRS Morningstar) published a commentary highlighting the factors that influence the assessment of commercial real estate (CRE) credit risk in loan portfolios. CRE lending is more cyclical and volatile than other types of lending, as evidenced by the significant amount of crises experienced over the past several decades, which resulted in a large number of bank failures. Consistent with historical trends and given the nature of the current coronavirus-driven downturn, we expect banks with high concentrations of CRE will be more vulnerable to the economic fallout than those with more diversified loan portfolios.
DBRS Morningstar is a global credit ratings business with 700 employees in eight offices globally. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry.
Together, we are the world’s fourth largest credit ratings agency and a market leader in Canada, the U.S. and Europe in multiple asset classes. We rate more than 2,600 issuers and 54,000 securities worldwide and are driven to bring more clarity, diversity and responsiveness to the ratings process. Our approach and size provide the agility to respond to customers’ needs, while being large enough to provide the necessary expertise and resources. For more details visit us at dbrs.com.
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