NEW YORK (Fortune) — Regional banks can no longer ignore the elephant in the room — their exposure to the commercial real estate bust.
Though housing markets remain weak, analysts expect credit problems over the next year to center on commercial real estate — mortgages on office and apartment buildings and shopping malls, as well as construction, development and industrial loans.
U.S. banks hold some $1.8 trillion worth of commercial loans, according to Federal Reserve data. Big regional banks, including PNC (PNC, Fortune 500) of Pittsburgh, KeyCorp (KEY, Fortune 500) of Cleveland and BB&T (BBT, Fortune 500) of Richmond, Va., have more than half their loan books in commercial loans.
Tags: Fortune 500, PNC