The Bleeding Regional Banking Sector in US: Battling Liquidity crises, deposit outflows and credit crunch, all at once

Due to the recent liquidity crisis of Q1 2023, the banking sector in the US is projected to witness a staggering YoY 20% drop in their earnings for FY2023. Bank deposits in the us shrunk by more than $1 trillion within a year at the height of the banking crisis as of march, signalling a record drop in bank activity for the upcoming quarters.

Bank profitability is estimated to deteriorate further as assets like commercial real estate (CRE) loans, totalling more than $1.5 trillion, are due for repayment within the next 3 years. This comes as the commercial property sector is in a downturn where its transaction volume fell by a whopping 57% in the past quarter, as per CBRE.

Read on as Jasper Colin's Market Watchdog explores the regional banking crisis as asset values are being drained by the macroeconomic environment, and a credit contraction is being hailed as a certainty by experts.