US federal banking regulators have released the 2025 Shared National Credit (SNC) report, concluding that credit risk in large, syndicated bank loans remains at a moderate level, despite continued pressure from high interest rates and broader macroeconomic challenges, DKNews.kz reports.
The report was jointly issued by the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), and is considered a key barometer of the health of the US banking system.
What the review covered
The 2025 SNC review examined large syndicated loans originated on or before June 30, 2025, focusing on:
- loan commitments of $100 million or more shared by multiple regulated financial institutions,
- leveraged loans and borrowers with elevated debt levels,
- stressed companies across a wide range of industries affected by higher borrowing costs.
Portfolio keeps growing
According to the report, the 2025 SNC portfolio included:
- 6,857 borrowers,
- $6.9 trillion in total loan commitments,
- a 6% increase compared to the previous year.
The share of loans requiring closer management attention — classified as “special mention” or “classified” — declined to 8.6% of total commitments, down from 9.1% in 2024. Regulators noted, however, that this decline mainly reflects the growth of new loan commitments rather than a meaningful improvement in overall credit quality.
Leveraged loans remain the main risk area
The report highlights that risk remains concentrated in the leveraged loan segment:
- nearly half of all SNC commitments are leveraged,
- leveraged loans account for 81% of non-pass loans.
This means borrowers with higher debt levels continue to pose the greatest potential risk, particularly in an environment of elevated interest rates.
US banks show relative strength
The data also points to stronger performance by US banks:
- US banks hold 45% of total SNC commitments,
- but account for only 22% of non-pass loans,
- a figure that declined slightly from last year.
This suggests that US banks generally maintain higher-quality portfolios compared to other market participants.
High rates test borrowers’ resilience
Regulators emphasized that current credit trends reflect borrowers’ ability to:
- manage higher interest expenses,
- adapt to slower economic growth,
- absorb rising costs and tighter financial conditions.
While most large borrowers continue to meet their obligations, risks remain elevated among highly leveraged companies.
Why it matters
The Shared National Credit report offers a detailed snapshot of systemic risk in the US banking sector. While the overall picture remains stable, the findings underline that credit quality — not credit growth — will be the key issue in 2026, as higher interest rates continue to test borrowers across the economy.
