In an interview with CNBC earlier this week, Goldman Sachs CEO, David Solomon, forecast the pressure on commercial real estate to continue, adding more challenges to banks. The bank plans to disclose markdowns on CRE holdings as the industry struggles to adjust to rising interest rates. During the interview, Solomon mentioned the company would report impairments on loans and equity investments associated with commercial real estate in Q2. - Goldman recorded around $400M in real estate loan impairments in the first quarter of this year.
- Although write-downs pose a challenge to the bank, Soloman said, they are manageable in the context of Goldman's overall business.
- However, he added that they might be less manageable for smaller banks, which provide around two-thirds of the industry's loans.
- Solomon said he was surprised by the U.S. economy's resilience and saw green shoots emerge after a period of restricted capital markets activities.
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