The latest Fed data shows that syndicated loan losses for major banks tripled in 2009 to $53 billion.
Furthermore, “criticised Assets”, ie. those assets which are rated as bad loans at risk of loss (Special mention, substandard, doubtful, or loss) rose 72% in a single year to a whopping $642 billion. The result is that 22.3% of the loans now held by institutions under federal supervision carry the criticised designation (Shown in red below).
Clearly the bad loan situation remains extraordinary, with a mountain of bad debt in the system.
Guess your loss rate, multiply by $642 billion, and you can arrive at a very rough back-of-the-envelope estimate for future loan losses. This wouldn’t even include potential further deterioration for other loan assets.
Please find the full Annual Nation Credits Review below.