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James Eyers

The new risk lurking in banks’ commercial real estate lending

While working from home is a known risk for office towers, Citi highlights a new pressure point for lenders – the growing cost of the energy transition.

Commercial real estate has long been considered the biggest risk lurking on bank balance sheets and Citi has highlighted a new pressure point in major lenders’ sprawling CRE portfolios – the growing costs of the energy transition.

Australian banks have $450 billion of loans to the commercial property sector, including high-rise office towers in the cities and retail shops on the high street. This represents 40 per cent of all their lending to non-financial companies.

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James Eyers writes on banking, payments and fintech. He is a former legal and investment banking editor at the AFR, has degrees in commerce and law from UNSW, and is co-author of Buy now, pay later: The extraordinary story of Afterpay Connect with James on Twitter. Email James at jeyers@afr.com.au

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    Original URL: https://www.afr.com/companies/financial-services/the-new-risk-lurking-in-banks-commercial-real-estate-lending-20240723-p5jvr3