US DATA: Fed-FDIC-OCC Shared National Credits Review for 2012 says
credit quality of banks’ large loan commitments improved for the third
yr. But “The volume of criticized loans remained high at $295b (10.6% vs
12.7% in ’11) compared with levels before the financial crisis, but
declined 8.1 percent from 2011… Reasons for improvement in credit
quality included better operating performance among borrowers, debt
restructurings, bankruptcy resolutions, and ongoing access to bond and
equity markets. Despite this progress, poorly underwritten loans
originated in 2006 and 2007 continued to adversely affect the SNC
portfolio. While the overall quality of underwriting of SNCs that were
originated in 2011 was significantly better than in 2007, some easing of
standards was noted, specifically in leveraged finance credits,
especially compared with the relatively tighter standards present in
2009 and the latter half of 2008. Refinancing risk eased during the past
year as 37.1 percent of SNCs will mature over the next three years
compared” vs 63.4% in ’11. SNC commits were +10.6% in ’12 to $2.79T.