Tight lending may be getting too loose: BB&T CEO
Loan underwriting, tightened dramatically after the 2008 financial crisis, is about halfway back to the "too liberal" standards before the Great Recession, BB&T Chairman and CEO Kelly King warned on CNBC on Thursday.
In a "Squawk Box" interview following better-than-expected earnings from the regional bank, King said he's "little concerned" that lending standards have been "coming back faster" than he had expected.
"I have been doing this for 41 years now," he said. "Usually, we go in a 10-year cycle of memories from the bad times to forget all the bad loans and start making bad loans again."
Thursday morning, North Carolina-based BB&T reported second quarter earnings of $0.77 a share—3 cents higher than Wall Street estimates. Revenues of $2.5 billion also beat expectations.
In the press release announcing the results, King touted the report as the "strongest quarterly earnings" in the bank's history. He said: "Improvement in credit quality accelerated this quarter and resulted in our best credit quality levels in five years."