Eighteen regional banks may add about $63 billion of holding company debt to meet proposed regulatory guidelines for lending institutions of $100 billion to $250 billion of assets, in the latest challenge to the sector, according to a Bloomberg report.
The fresh capital would be needed for banks such as First Citizens FCNCA, +1.41%, Truist Financial Corp. TFC, +1.62%, PNC Financial Services Group Inc PNC, +0.93%, Citizens Financial Group Inc. CFG, +1.43% and M&T Bank MTB, +0.83%, the Bloomberg report said.While the capital raise would be significant to comply with long-term capital requirements and other measures proposed by the Federal Reserve and the Federal Deposit Insurance Co.
A report this week by The Wall Street Journal said banks about doubled their loan activity to landlords to a total of $2.2 trillion by 2022 from 2015, with small- and medium-sized institutions originating many of them. Prices for commercial real estate, particularly downtown office properties, are expected to drop, which is a troubling sign for lenders.
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