Martin Melilli, market president – Central New Jersey for TD Bank, spoke optimistically about the state of economy at last week’s Real Estate Market Forecast program put on by the Newark Regional Business Partnership.
Many of the key year-to-year-indicators — including residential mortgages, and small business and commercial loans and deposits — are up, he said.
But it isn’t a totally rosy picture. Melilli quickly discussed the three biggest impactors in banking today — and two of the three are bad.
- Coronavirus: “Factories have shut down in China right now,” he said. “Supply chains have been stretched or halted altogether. So, we’re talking to our customers about what they should be doing, who are their suppliers, how are their inventory levels, perhaps putting lines of credit in place for them — or looking at their lines of credit. (We’re trying to help them) weather the storm.”
- Fraud: “We’ve seen a tremendous amount of fraud lately,” he said. “A huge increase. Everything from the old school fraudulent checks to more modern takeover of accounts and cyberattacks. I suggest you talk to your banker to see what you can do to protect yourself.”
- Low interest rates: “I can’t believe where we are,” he said. “Historic lows. The short answer: Borrow as much as you can right now.”
But even this came with a warning: “Frankly, if the project you’re thinking about right now doesn’t work with this interest rate, then you ought to think about a different project,” he said.
Melilli, however, still gave a positive outlook. Other indicators, he said, are doing too well to think otherwise.
“Despite of all that, loans and deposits have been growing pretty steadily for the last 18 months,” he said. “Residential mortgages are up 12% year over year. Consumer deposits are up another 4.5%. Small business loans and deposits are both up 6% year over year. And large commercial loans and deposits are up 2-3%.
“At the end of the day, it’s kind of steady as it goes with the banking industry right now.”