Credit quality

The energy business alone faces immense challenges and the overall economy may not bounce back until 2022, Stephen Steinour says.

Banks had an opportunity to delay compliance with the new accounting standard, but many opted to move forward to get ahead of credit issues that could arise from the coronavirus outbreak.

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.

Net income fell 46% in the first quarter as the company added nearly $5 billion to its loss reserves in anticipation of a wave of loan defaults.

With the coronavirus pandemic bringing economic activity to a virtual standstill, BofA, like Wells Fargo and JPMorgan Chase, is shoring up its reserves to brace for a likely recession.

Its prediction that business conditions will remain weak this year — and into next year — stands in stark contrast to forecasts from political leaders that the economy will rebound quickly from the coronavirus pandemic.

Though hopeful for a second-half bounceback in the economy, JPMorgan Chase is prepared for 20% unemployment, lackluster GDP and losses in its loan portfolio that could reach tens of billions of dollars.

The Pennsylvania company said it faces $7.5 million in potential exposure from a commercial lending relationship.

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.

TrueAccord has expanded a platform, originally designed for banks, to assist borrowers hurt by the coronavirus pandemic.

The pandemic could lead to a sharp rise in defaults and loan requests from farmers who have struggled with low prices and the impact of trade wars.

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.

The company is one of the first to share information on impacted clients, forbearance requests and emergency loan applications.

Alliance Data Systems, which has substantial exposure to the mall-based retail sector, sought Tuesday to assuage investors' fears about the impact of the COVID-19 outbreak.

Bankers will be pressed on upcoming earnings calls to forecast how the coronavirus pandemic — and the government's response — will shape credit quality, margins and fee income.

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.

Banks are avoiding the once booming hospitality business, or charging a premium for additional credit, as new data shows how big a hit hoteliers have taken from the pandemic.

Lenders are concerned that the coronavirus outbreak will increase vacancies and add to credit risk.

Banks with the most exposure to oil and gas companies say they’ve added capital and changed their borrower mixes since the 2015 market fall. But skeptics question whether they can stave off losses if low prices endure.