An American bank that lends a lot of money to investors in commercial real estate, New York Community Bancorp (NYCB), has run into problems.
The company has discovered that internal controls on credit risks are not in order. The company has also been forced to write off 2.4 billion dollars on past transactions.
In a report submitted to the SEC, the company also says that the annual report will not be completed on time due to the problems. Investors were shocked by the news. In so-called pre-market trading, NYCB lost about 28 percent on Friday afternoon.
NYCB also frightened investors at the end of January. The bank announced that it would set aside significantly more money to deal with possible loan problems to apartment landlords. Since then, investors in regional banks have been concerned about the impact of stricter rent restrictions in New York, which have been in place since 2019, on the financial health of major landlords.
NYCB is very sensitive to developments in that sector. The company has about $37 billion in loans outstanding to apartment landlords.