"Shark Tank" star Kevin O'Leary believes that the commercial real estate sector is on the brink of collapse, and will bring with it ripple effects that will be detrimental to investors and small.
Over the past two years, Australian banks have benefited first from a property boom on the back of Covid restrictions and then from interest rate hikes totalling 400 basis points. Macquarie, an investment bank with a small retail banking operation, said banks' cost bases are likely to remain under pressure as more than 70% of their expenses related to personnel. Macquarie added that it expects banks' expenses to grow by around 1% to 7% in fiscal 2023 through to fiscal 2025, with third-biggest lender Westpac Banking Corp seen being impacted more than its peers.
Cadence Bank CEO Dan Rollins calls the regional banking crisis from earlier this year "March madness." "We don't want an asset that doesn't come with a full wallet," Rollins said, referring to a trend since the crisis where banks want customers who want loans to also bring them their deposits. Rollins' southeastern regional bank is not alone.