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2/25/2021

Federal Reserve Board - Agencies issue Shared National Credit Review

Joint Press Release
February 25, 2021

Agencies issue Shared National Credit Review
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
For release at 10:00 a.m. EST
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Credit risk for large, syndicated loans has increased over the last year, according to the 2020 Shared National
Credit (SNC) Review released by federal bank regulatory agencies today. The elevated risk is largely
attributed to the effects of COVD-19. While risk has increased, many agent banks have strengthened their
risk management systems since the prior downturn and are better equipped to measure and mitigate risks
associated with loans in the current environment.
The review, which evaluates the quality of large syndicated loans, was conducted by the Federal Reserve
Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, and
reflects examination of SNC loans originated on or before June 30, 2020. The 2020 results provide additional
analysis focusing on borrowers in five industries that were affected significantly by the pandemic:
entertainment and recreation, oil and gas, real estate, retail, and transportation services.
The 2020 SNC portfolio included 5,652 borrowers, totaling $5.1 trillion in commitments, up 5.0 percent from a
year ago. Nearly half of the total commitments were leveraged loans. The percentage of "non-pass" loans,
including special mention and classified SNC commitments, for the portfolio rose from 6.9 percent to 12.4
percent year over year. While U.S banks held nearly 45 percent of all SNC commitments, they held less than
a quarter of non-pass loans. For leveraged borrowers operating in COVID-19 affected industries, non-pass
loans rose from 13.5 percent to 29.2 percent year over year. Commitments to borrowers in COVID-19
affected industries represented about one-fifth of all SNC commitments.
In response to the increase in loan risks, banks substantially increased their loan-loss reserves, and
aggregate capital in the system has risen by nearly a percentage point since March of 2020. Supervisors will
monitor the performance of this portfolio relative to the increased loss cushion established by banks during
2020.

2020 SNC Program Review Report (PDF)

Media Contacts:
Federal Reserve Board
FDIC
OCC

Darren Gersh
Julianne Fisher Breitbeil
Stephanie Collins

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210225a.htm

202-452-2955
202-898-6895
202-649-6870
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2/25/2021

Federal Reserve Board - Agencies issue Shared National Credit Review

Last Update: February 25, 2021

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210225a.htm

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