The banking sector’s exposure to the retail sector will become an issue for investors worried about credit quality, Morgan Stanley analyst Ken Zerbe wrote in a note.
Zerbe stopped short of equating exposure with risk of actual loss, but the analyst said that he is concerned that investors will “shoot first and ask questions later” on retail credit quality.
Zerbe does recommend that investors lighten their exposure to retail-heavy banks, even though he admits it’s too early to tell whether retail’s struggles will result in rising credit losses.
