About Christopher Moral-niles
Christopher Del Moral-Niles, Executive Vice President and Chief Financial Officer of East West Bancorp, discussed the bank's fourth-quarter earnings and its outlook in a September 2024 interview. He stated that 96% of the bank's business is driven by the American market, and described the Chinese American community as "remarkably resilient" and "remarkably loyal." Del Moral-Niles attributed the bank's softer loan growth guidance to the U.S. economic outlook, noting that the bank is not seeing the level of commercial real estate transactions that would support strong growth in that sector over the next few quarters, and predicted that business would slow further.
Del Moral-Niles said the bank will continue to grow in commercial and industrial lending and residential lending, but will not grow commercial real estate as it has in the past. He suggested that a return to normal transaction levels in commercial real estate may require the Federal Reserve to lower interest rates by 100 to 150 basis points. Regarding the aftermath of the Silicon Valley Bank collapse, Del Moral-Niles stated that East West is "stronger than ever," that the market share landscape has shifted in the bank's favor, and that the bank added net new customer accounts and grew to record levels.
Source: AI-verified profile updated from Christopher Moral-niles's recent appearances.
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Transcript (10 segments)
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Christopher Moral-niles0:06
Last spring. Joining us CFO Chris Niles is with us. You have an interesting lens given the exposure to the U.S. and China markets and whether China uncertainty is impacting things like loan growth.
Carl, thank you, and good morning. As you know, we are an American bank, and so the reality is 96% of business is driven by the American market. We've been very pleased to see the reception up over 5% of our earnings week to our results and are focused on continuing to drive that cross border activity that makes us a unique player in the market.
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Interviewer0:43
That's not made its way into, to say, the Chinese American community here.
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Christopher Moral-niles0:48
Our Chinese American community has proven remarkably resilient, remarkably loyal, and as supporting the growth in activity that happens across the border between the two countries, and we play a unique role in that. But the reality is the strength of that community here domestically, and despite the challenges perhaps abroad, the growth trends are still positive in both and continue to drive our business forward.
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Interviewer1:14
But a lot of the analysts did note the softer loan growth guidance and wondering what that's about and whether you're seeing credit concerns.
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Christopher Moral-niles1:22
The softer loan growth guidance is about the outlook here in the United States. And so our loan book is 96% in the United States and a portion of our loans is here in U.S. commercial real estate. And as we look at the current environment, we're not seeing the level of transactions happening that would support strong growth in commercial real estate over the next couple of quarters. In fact, we think that business will slow further. And since that's historically been a part of our growth, when you slow that down, our growth will naturally slow. We're going to keep pace on commercial and industrial lending and will continue to outpace on residential lending. We've grown that nicely the last several quarters and we'll be a growth bank. We just won't be growing commercial real estate the way we have in the past in this environment.
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Interviewer2:10
How long do you think it's going to take for that to inflect back higher? Is it going to be about time or the absolute level of rates or transaction volume or something else?
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Christopher Moral-niles2:20
It's a meeting of expectations on the part of sellers and their cap rates, and the financing levels where new deals can be put on. That probably has to be when the Fed works its way down a few, maybe 100, 150 basis points, until we get to a better place where transactions can happen again, where people aren't under water and are comfortable moving property again.
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Interviewer2:42
Chris, you have exposure in California, and I'm curious what you're seeing in that economy and also if there's any fallout still from the Silicon Valley Bank collapse, whether it led to anything different for you in terms of market share or different expectations among depositors.
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Christopher Moral-niles3:01
It led to a number of things. East West is stronger than ever. We have seen a number of our competitors disappear and a number acquired. And so the reality is the market share landscape has shifted to our favor over the past year, which is part of the reason why we added net new customer accounts and we grew to record levels.
