NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) has issued a new research report entitled “Review & Preview – Credit Industry Trends and Emerging Risks Q1 2015.” The report makes the following key points:
- Asset returns for all U.S. banks actually fell below 1% for the first time in two years, according to the Federal Deposit Insurance Corporation. KBRA notes that the total cost of funds for all U.S. banks was just $11 billion in Q4 2014 vs $119 billion in interest income, an illustration of the huge wealth transfer from savers to banks occurring under the FOMC’s low rate policies.
- KBRA believes that bank earnings and asset returns are likely to continue to be under pressure through 2015 and beyond as institutions try to offset declining core earnings on assets with efforts to boost fee revenues, realize greater operating efficiencies, asset sales and other expedients.
- KBRA believes that, as with 2014, the most robust loan growth in 2015 will likely occur in the community bank sector in asset classes such as C&I and commercial real estate. While accounting for only 10% of industry assets, community banks actually grew loans at twice the industry average in 2014.
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About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).
