The white-collar remote work revolution could permanently reshape the office market, bankers say. “The next few years are going to be a real challenge for offices, and a lot of that has to do with remote work,” said Michael Morris, chief credit officer at Salt Lake City-based Zions Bancorporation. Year-on-year Compared with the first quarter, the bank’s credit loss provisions increased by more than 30%.
Christopher Gorman, chief executive of Cleveland-based KeyBank, one of the nation’s largest servicers of commercial real estate, called it a “surge” in demand for special services, the process for handling troubled loans. Mr. Gorman said office projects had recently overtaken retail construction as the largest category of loans in special services.
A credit crunch could tip the economy into recession, hurting banks’ profits.
Banks are tightening lending standards, although they view the changes as tweaks rather than major pullbacks.
“We try to be consistent through good times and bad times, yes, because our customers value consistency,” said Darren J. King, chief financial officer at Buffalo-based M&T Bank.
Still, echoing warnings from big bank leaders, smaller lenders are bracing for a downturn. Bruce Van Saun, chief executive of Citizens Financial Group in Providence, R.I., said his bank is adjusting its lending decisions to account for the possibility of a “short, mild recession.” Charlotte, N.C.-based Truist, the seventh-largest U.S. lender, said it was more cautious about extending credit in what the bank’s chief financial officer Michael Maguire called an “environment of increasing risks.” .
