In case you thought you were “late to the party”.
Fitch Ratings-Chicago-12 February 2013: U.S. banks holding large levels of nonperforming assets (NPAs) on their balance sheets are likely to pursue more bulk sales of distressed loans this year and next, according to Fitch Ratings. Four years after non-accruals began to spike during the financial crisis, many smaller institutions with large residual NPA balances, particularly related to commercial loans, will be in a better position to use bulk sales to strengthen balance sheets if market liquidity and asset pricing continue to improve in 2013.
We expect banks with stubbornly high commercial-related NPAs to accelerate sales activity over the next 12 to 18 months, particularly as many CRE loans originated prior to the crisis approach maturity. Additional scrutiny of loss reserve positions by bank regulators, as well as the absence of access to attractive financing, may also increase pressure on more small and midsize banks to unload NPAs. Sales also make sense for banks in closing out regulatory actions related to asset quality. Source- www.fitchratings.com
More than 3,000 banks are reporting nonaccrual commercial real estate loans and more than 623 banks sold nonaccrual last quarter.And I know there’s good market news being reported daily but if you ask me, we’ve still got a long way to go on a few fronts.