To help you understand what is going on in the banking and finance sector our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
Regional banks aren’t out of the woods yet. Their stocks were hammered recently after news of New York Community Bank's (NYCB) big fourth-quarter loss led the bank’s shares to fall about 60%.
NYCB is unusual in its role as a major lender to rent-stabilized landlords in New York City. Most of its total multifamily loan book is secured by properties in New York state, many of which are subject to rent control. Big drops in the values of office buildings will put pressure on some banks. Expect delinquency rates on commercial mortgage-backed securities to double in 2024.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
On a more positive note, deposit outflows from small and midsize banks have slowed. Depositors appear less concerned with losing uninsured money after regulators stepped in early last year to insure all deposits at Silicon Valley Bank and First Republic Bank. Net interest income (NII) — the difference between what banks earn from lending and pay out on deposits — will likely fall for most regional banks this year, as they will have to pay more to depositors. How much depends on how much longer interest rates stay high. Large banks should avoid the stock sell-off because they are more diversified and have set aside greater reserves to cover potential loan losses than smaller banks.
Banks are still tightening lending standards, but at a slower pace, according to the latest survey of senior loan officers. Also, the share of banks that are doing so has fallen considerably after peaking after last spring’s crisis of regional bank failures. A less favorable and uncertain economic outlook, worsening in credit quality of loans, and lower collateral values are among the top cited concerns. Businesses’ demand for credit keeps falling, especially among small firms.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related Content
-
Don't Toss It! Why Your Medicare Annual Notice of Change MattersIf you have Medicare Part D or a Medicare Advantage plan, reviewing your Annual Notice of Change is crucial. It can save you money and ensure you can still see your preferred doctors and hospitals.
-
S&P 500 Hits New High After Oracle Earnings: Stock Market TodayAnother down day for Apple held the Dow Jones Industrial Average back, though.
-
How AI Puts Company Data at RiskThe Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
-
AI Start-ups Are Rolling in CashThe Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
-
What is AI Worth to the Economy?The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
Kiplinger Special Report: Business Costs for 2026Economic Forecasts Fresh forecasts for 2026, to help you plan ahead and prepare a budget on a range of business costs, from Kiplinger's Letters team.
-
Trump-Era Regulations Will Broaden Access to CryptoThe Kiplinger Letter The president wants to make the U.S. the leader in digital assets.
-
How to Adopt AI and Keep Employees Happy
The Kiplinger Letter As business adoption of AI picks up, employee morale could take a hit. But there are ways to avoid an AI backlash.
-
The Rise of AI: A Kiplinger Special ReportThe Kiplinger Letter Our special report looks at the opportunities and challenges of generative AI and how its rapid move into the mainstream is impacting every aspect of our lives.
-
Big Changes Are Ahead for Higher EdThe Kiplinger Letter A major reform of higher ed is underway. Colleges are bracing for abrupt change, financial headwinds and uncertainty.
