Credit

The COVID-19 pandemic has teed up a growth opportunity for the buy now, pay later (BNPL) financial industry, as recession worries made people receptive to entering short-term payment plans that can fit in a budget.

Criticized assets are on the rise, especially in commercial portfolios, and may be the forerunner of a wave of loan losses later this year or next year unless economic conditions strengthen.

More than a third fear the fallout from the coronavirus pandemic could drag into 2022 or later, and they are most worried about commercial real estate loans, according to a Promontory Interfinancial Network survey.

One of the few clear implications from the initial two months of the lockdown with the changes to consumer behavior and the uncertainty ahead is the imperative for organizations to regain clarity on credit risk by obtaining a more complete picture of consumer creditworthiness, says LexisNexis Risk Solutions' Ankush Tewari.

Community bank earnings are usually easy to understand, but loan deferrals and modifications as well as the complexities of the Paycheck Protection Program are skewing financial statements.

A public listing would improve Affirm’s competitive position against other point of sale credit providers, which have made recent deals to cement their scale among global merchants.

Current economic conditions will have "a continued adverse effect on our businesses” if they persist or worsen, Bank of America warns.

The pandemic will have an impact on customer adoption of digital technologies. Financial institutions and fintechs can achieve growth by gaining consumers' trust and changing their mindset about new platforms.

Cash usage dropped much lower due to the coronavirus pandemic, and it appears that credit cards may be exhibiting some signs of abandonment as well.

In what was a challenging quarter for the industry, the company reported strong loan growth and a wider margin. Continued momentum will depend on government stimulus, the reopening of New York City and borrowers' ability to make payments after their deferral periods end.

The Ohio company, which has beefed up its loan-loss reserves, raised the possibility of more sales of oil and gas credits and talked up strong retail segments such as its marine and RV loans.

CEO Greg Carmichael says the Cincinnati company has cut expenses but will proceed with branch openings in the Southeast and investments in its commercial loan and mortgage origination platforms to lay the groundwork for post-pandemic growth.

Installment payments are gaining mainstream appeal as an alternative to traditional credit products, prompting Affirm to boost its visibility in an increasingly crowded market.

Other regionals set more aside for loan losses than the Cleveland bank did in the second quarter, and its ratio of reserves to total loans is slightly lower, too. But Key executives say the portfolio is balanced and holding up well despite the pandemic’s economic toll.

Banking and credit reporting groups say such an agency could politicize the reporting process. Consumer groups say it would offer consumers a necessary alternative.

The Georgia company warned that outstanding loans could fall and deferrals will likely rise as its home state and Florida grapple with the pandemic.

Loans to retailers and hotels are at the highest risk of default, the Salt Lake City company said in its second-quarter earnings presentation.

Old scoring and algorithms don't consider a rapidly changing economy and risks, according to consultants Maria Arminio and Bo Berg.

The Mississippi company said it decided to take aggressive measures to reduce its exposure to energy firms.

The company said it recorded a large loan-loss provision in the second quarter to reflect Coex Coffee International's pending liquidation.