Federal bank regulatory agencies have released the 2024 Shared National Credit (SNC) report, indicating that credit risk linked to large, syndicated bank loans remains moderate. The report highlights ongoing weakened credit quality trends due to the impact of higher interest rates on leveraged borrowers and compressed operating margins in certain industry sectors.
The agencies also emphasized that the level and direction of risk in 2025 will likely be influenced by borrowers’ ability to manage interest expenses, real estate conditions, and other macroeconomic factors.
The 2024 review examined SNC loans originated on or before June 30, 2024. It focused on leveraged loans and stressed borrowers across various industry sectors, assessing aggregate loan commitments of $100 million or more shared by multiple regulated financial institutions.
In the 2024 SNC portfolio, there were 6,699 borrowers with total commitments amounting to $6.5 trillion. This represents a 1.8 percent increase in commitments from the previous year. The percentage of loans requiring management’s close attention—referred to as “non-pass” loans comprising SNC commitments rated “special mention” and “classified”—rose from 8.9 percent of total commitments to 9.1 percent year over year. U.S. banks hold 45 percent of all SNC commitments but only account for 23 percent of non-pass loans. Nearly half of total SNC commitments are leveraged, with leveraged loans making up 79 percent of non-pass loans.
