Trepp Announces Four Predictions for CCAR 2016 Results

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Trepp has announced four predictions for the CCAR 2016 results based on output from their T-CAST platform.

CCAR Credit Losses

Trepp’s visibility into CCAR results could be greatly valuable to investors, as dividends at the top banks are tied to these outcomes.

Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, announced its four predictions for the CCAR 2016 results (http://info.trepp.com/trepp-ccar-predictions-june-2016-press-release) today.

Based on output from Trepp’s T-CAST (Trepp Capital Adequacy Stress Test) platform for the Severely Adverse supervisory scenario, Trepp’s key expectations for the results in CCAR 2016 are the following:
1)    Stressed loan losses will increase by an estimated 10% compared to 2015.
2)    Estimated losses will increase the most in the C&I, CRE and Credit Card loan categories, and will fall in Residential loan types.
3)    An estimated 20 to 22 firms will receive approval to raise their dividends.
4)    At least one firm will receive an objection, most likely on qualitative grounds.

“Trepp’s visibility into CCAR results could be greatly valuable to investors, as dividends at the top banks are tied to these outcomes,” said Trepp Managing Director, Matt Anderson. “So even though the stress tests represent a ‘what-if’ scenario, the results are very meaningful to the banks and stakeholders.”

For the 33 firms that are part of CCAR this year, Trepp’s T-CAST platform forecasts cumulative loan losses of $322.9 billion under the Severely Adverse supervisory scenario. That represents a $30 billion increase from the $292.9 billion in forecasted cumulative losses that T-CAST produced for the banks in the 2015 round of CCAR.

Trepp’s T-CAST platform produces comprehensive scenario-based forecasts for DFAST submissions. It includes forecasts for individual bank balance sheets, income & expense, loan losses and capital impacts for banks and bank holding companies. T-CAST takes the same economic scenarios used by the Federal Reserve for DFAST and CCAR to produce an enterprise-wide picture of individual firms through a 9- or 13-quarter forecast horizon.

For additional details on our predictions and the statistics behind them, download Trepp’s Four Predictions for CCAR 2016 (http://info.trepp.com/trepp-ccar-predictions-june-2016-press-release). For daily banking commentary, follow @TreppWire and @TreppBanking on Twitter.

About Trepp
Trepp, LLC, founded in 1979, is the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets. Trepp provides primary and secondary market participants with the web-based tools and insight they need to increase their operational efficiencies, information transparency and investment performance. Trepp serves its clients with products and services to support trading, research, risk management, surveillance and portfolio management. Trepp is wholly-owned by dmgi, a division of the Daily Mail and General Trust (DMGT).

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Sean Barrie
Trepp
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