New York Community Bancorp (NYCB) continues to feel the pressure a year after Silicon Valley Bank's collapse. That stress may be alleviated now that former Treasury Secretary Steve Mnuchin is leading a team of investors to inject $1 billion in bailout funds into regional banks.
KBW's Head of US Bank Research Chris McGratty joins Yahoo Finance to discuss NYCB's commercial real estate concentration issue and broader challenges for the regional banking sector.
To address banks' large share of commercial real estate, McGratty outlines several paths forward for New York Community Bancorp's management.
“The concentration issue is an issue that they are trying to address. If they were to sell this portfolio, the mark they would have to take given the interest rate situation would be capital-destroying. So it is “It's going to put even more pressure on the bottom line. We have to take a step back and think about what we can sell, what we can reduce or remove from the balance sheet. We estimate that we have approximately $24 billion to $25 billion of loans on our balance sheet that could be sold or sold.''
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Editor's note: This article was written by Nicholas Jacobino
