
Nearly a year after a banking crisis caused the collapse of three US regional lenders and the emergency takeover of Credit Suisse in Europe, a new problem is affecting banks in New York, Tokyo, and Zurich. The common issue across these banks is increasing losses related to lending in the troubled commercial property sector, as reported by CNN.
New York Community Bancorp Faces Steep Decline
On Wednesday, shares in New York Community Bancorp dropped by 38%, reporting a loss of $252 million for the last quarter. The regional lender allocated $552 million in the fourth quarter to cover loan losses, a significant increase from the previous quarter’s $62 million. The surge in losses is attributed in part to expected setbacks on a loan for an office building, according to CNN.
Aozora Bank in Japan Hit by US Office-Related Bad Loans
Aozora Bank in Japan announced on Thursday that bad loans tied to US offices contributed to its projected annual loss of 28 billion yen ($190 million) for the previous year. This revelation caused the bank’s shares to plunge by over 21%, as reported by CNN. Aozora Bank estimates that it will take another one or two years for the US office market to stabilize, coinciding with a return to in-person work and a shift in Federal Reserve interest rate policies.
European Losses Continue with Julius Baer
In Europe, Julius Baer, a Swiss private bank and wealth manager, revealed on Thursday that its adjusted profit had declined by 55% last year. The bank attributed this decrease to a loss of 586 million Swiss francs ($680 million) on loans made to a single “European conglomerate,” according to CNN.