Credit quality

As revenue-starved retailers fall further behind on rent payments, landlords' cash flow will be strained, and defaults on commercial real estate loans could rise.

The economic contraction caused by the coronavirus pandemic has been worse than the Wall Street firm had modeled two months ago, its president John Waldron said Wednesday.

Lenders that scrambled to grant forbearance as the coronavirus pandemic took hold are unsure about the extent of potential losses.

More details have emerged about the damage the coronavirus pandemic is inflicting on the hospitality industry. One servicer alone has received 2,000 workout requests in the past month.

After more than tripling its loan-loss provision, the $182 billion-asset company became the first large U.S. bank to report a quarterly loss as a result of the coronavirus pandemic.

By helping borrowers now, banks hope customers can quickly catch up on payments once the coronavirus pandemic ends. If they can’t, interest income will remain low and charge-offs could pile up if the crisis drags on.

Closed showrooms, temporary bans on repossessions and a sudden spike in unemployment have dimmed the prospects of a sector that has boomed since the last recession.

Commercial real estate lenders have to consider not only how they’ll weather the COVID-19 downturn, but whether worker and consumer habits have changed for good.

Regulators' decision to delay reporting for troubled-debt restructurings should allow banks and credit unions to be more nimble modifying loans impaired by the coronavirus outbreak.

Nonbanks hold a disproportionate percentage of the worst-rated loans, but banks hold a majority of the market, and risk management safeguards are largely untested, according to an interagency report on shared national credit.