Towering inferno consumes a bank


It’s been burning in the background unabated:

New York Community Bancorp, one of the winners as regional lenders struggled and collapsed last year, plunged a record 46% as investors worried it’s now the harbinger of the industry’s next source of pain: commercial real estate.

The firm, which acquired part of Signature Bank last year, stockpiled cash as it contends with lending risks — including a pair of troubled loans for a co-op complex and office space — as well as stiffer regulation due to its size. The bank’s provision for loan losses surged to $552 million, shocking analysts and shareholders.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.