Banks hit by commercial real estate crisis

Germany’s largest bank, Deutsche Bank, has set aside 123 million euros to cover possible losses linked to US commercial real estate in the fourth quarter of 2023.
Spencer Platt/Getty Images via AFP

Decryption – Too exposed to the office market across the Atlantic, many smaller American and German firms are struggling.

A threat that has been feared for more than a year is starting to materialize: the commercial real estate crisis (offices, businesses, hotels, etc.) is catching up with banks in the United States, Europe and Asia, raising the risk of a new crisis, a year after March 2023. In , small American regional banks were affected.

The first signs appeared in late January in the United States. New York Community Bancorp (NYCB), which bought its bankrupt rival Signature Bank last year, announced a $185 million loss after setting aside more than $552 million to cover potential real estate credit losses. A very high amount in relation to its size, ten times more than the financial community expected. Until now, NYCB was not obliged to shed light on its records.

But in 2022, Flagstar’s takeover of Signature Bank will push its assets to more than $100 billion…

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