(December 6 – 10:40 ET) – CIBC and TD Bank have been singled out by Standard & Poor’s for their risky telecom loans.

A report released by S&P yesterday says that CIBC and TD have the greatest exposure to risky telecom loans among the leading global lenders to the telecom industry. S&P said the pair hold risky loans in the telecom space equal to 26% and 25% of tangible equity, respectively.

The exposure isn’t expected to hurt either bank’s results materially. By comparison, the real estate debacle of the 1980s saw banks holding loans equal to up to 100% of tangible equity. But S&P said most other leading lenders kept risky telecom loan exposure to about 8% of tangible equity.

“It’s widespread throughout the world, so we are all in this together,” Tanya Azarchs, S&P analyst and author of the report told the Financial Times. “In and of itself, it’s not going to bring down any of the banks.”
-IE Staff