The Lending Practice

Private Lenders Are Offering Cheaper Debt Than Wall Street Banks

Direct lenders are lavishing risky companies and private-equity firms with capital at rates below what’s available in the volatility-lashed high yield and syndicated loan market.

Private Lenders Are Offering Cheaper Debt Than Wall Street Banks Direct lenders are lavishing risky companies and private-equity firms with capital.

Businesses Are Loading Up on Credit. Spending Could Follow.

At JPMorgan and Bank of America, undrawn credit commitments total nearly $1 trillion, a 20% increase from a year ago

Credit

Businesses Are Loading Up on Credit. Spending Could Follow. Businesses are sitting on record amounts of unused credit from U.S. banks, another quirk in the economic recovery that bankers say could help unleash pent-up spending in the coming months.

Red flags abound in syndicated lending

About 12.4% of loans in the syndicated credit market last year were deemed “classified” or “special mention” — nearly double the 6.9% seen one year earlier, the report from the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency showed.

Red flags abound in syndicated lending Shared national credit balances rose 5% last year, and the percentage of at-risk loans nearly doubled. Regulators point out that banks have stashed away extra capital, but a lot will depend on the speed of the economic recovery and the performance of nonbank loans.

https://www.linkedin.com/posts/paul-spiteri-221aa6_lendingsolutions-success-motivation-activity-6787807827009376256-ffaK

Paul Spiteri on LinkedIn: #lendingsolutions #success #motivation What an amazing day being back in our office together with the biggest group of people since the pandemic started! It is so great to be with the team and...

ARRC: USD Libor Exposure Grows as Cessation Deadline Nears

The ARRC raised concerns about a lack of progress in transitioning business loans, noting that borrowers need to be prepared to accommodate new rates and that they may wish to transition more gradually, “which cannot occur if lenders do not offer alternatives soon.”

ARRC: USD Libor Exposure Grows as Cessation Deadline Nears | ABA Banking Journal The volume of financial instruments that reference USD Libor has grown to $223 trillion, up from $199 trillion in 2016, according to the Alternative Reference Rates Committee.

Banking on ECORA’s Encore

ECORA is intended to lower the cost for farmers and ranchers to acquire credit in rural America. It would create equity in agricultural real estate and lower costs for farmers to acquire credit.

http://ow.ly/ZOAU50E7R4H

Banking on ECORA’s Encore | ABA Banking Journal Though the goals for passing of the reintroduced Enhancing Credit Opportunities in Rural America Act of 2021, commonly known as ECORA, haven't changed much over the last few years, this Congress may have a better shot at leveling the playing field between farm banks and Farm Credit System lenders, u...

Signs point to more bank-nonbank M&A in 2021

Many banks describe the search for wealth management, insurance, fintech and other nonbank acquisition candidates as a priority. Several have already announced nonbank deals this year.

Signs point to more bank-nonbank M&A in 2021 Acquisitions of wealth management, insurance, fintech and other firms are expected to pick up as banks seek new sources of fee income and look to improve digital capabilities.

Will competition for C&I loans lead to looser underwriting?

Competition for business loans is poised to heat up as banks look to reinvest deposits and alternative lenders remain open to taking on more risk.

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Will competition for C&I loans lead to looser underwriting? Banks and nonbanks are expected to vie for more commercial business this year, and nonbanks already have signaled a willingness to ease lending standards in order to win business.

Paul Spiteri, CEO of The Lending Practice, has been quoted in The Wall Street Journal's article on the case for back-end technology upgrades,"Business Software Faces Pressure to Update Its User Experience." Paul's expertise in both Commercial Lending technology and services provides fresh insight into the complex issues facing financial institutions with commercial lending businesses.

The article, posted today in The Journal's Experience Report section, presents the case for upgrading back-end corporate lending technology in the face of Citi's accidental $900 million payment to its lenders.

Business Software Faces Pressure to Update Its User Experience When Citigroup last year sent almost $900 million to lenders in error, it not only set off a legal fight over the money but unwittingly highlighted a separate issue in the back office: the frequently clunky experience of using business software.

What will drive bank M&A in 2021

Three factors have fueled previous surges in bank M&A — low interest rates, a need to cut costs and the need to invest in technology. All of them were present before the pandemic and are present now — in fact, the pandemic may have made those pressures more acute.

What will drive bank M&A in 2021 Mergers and acquisitions were largely on ice in 2020, but banks' mounting need to control expenses and invest heavily in technology could spur a comeback this year.