S&P Global Market Intelligence Report Reveals Private Credit's Disruption and Impact on Credit Quality in the Banking Landscape

Private credit firms capture market share and form strategic partnerships with traditional banks, but some question the sector’s resilience

NEW YORK (November 6, 2025) – S&P Global Market Intelligence has released a new report focused on the intersection between Banks and Private Markets titled, Big Picture 2026 Outlook: Private Credit Shaking Up the Banking Landscape. The report examines how private credit firms are fundamentally reshaping the banking industry, generating both opportunities and risks for financial institutions. The report reveals that private credit has grown to exceed $1.7 trillion globally, with nine of the top 20 firms being major private equity players.

The research shows that while private credit firms have captured significant market share from traditional banks, they are also supporting asset values and bank credit quality, particularly in commercial real estate lending. Major financial institutions have announced partnerships with private credit firms and have lent directly to them as evidenced by the surge in loans to nondepository financial institutions. Within that segment, loans to private equity firms have jumped 57% through the first six months of 2025. However, recent bankruptcies and fraud cases have spurred loan losses at some banks and raised concerns about the sector's resilience.

"Private credit firms have experienced explosive growth since the financial crisis, creating more competition for traditional banks while also presenting partnership opportunities," said Nathan Stovall, Director of Financial Institutions Research, S&P Global Market Intelligence. "While many lenders are concerned about ceding market share, some banks see an opportunity to work with private credit firms to continue to serve their customer base."

Key findings include:

• Market Growth: Private credit funds now account for a substantial portion of commercial and industrial lending and still had more than $160 billion in dry powder as of late September. 
• Bank Partnerships: Large and regional banks are forming strategic alliances with private credit firms rather than purely competing with these nonbank lenders.
• CRE Support: Private credit firms have helped stabilize commercial real estate valuations by lending directly against properties and purchasing loans at favorable prices. The shift has allowed banks to reduce their exposure to the asset class — banks deemed to have an elevated CRE concentration had fallen to 375 institutions at the end of the second quarter, down from 567 two years ago.
• Risk Concerns: Recent fraud cases and bankruptcies have highlighted potential vulnerabilities in the rapidly growing sector.

To request a copy of Big Picture 2026 Outlook: Private Credit Shaking Up the Banking Landscape, to access the full suite of 2026 Big Picture reports, please contact press.mi@spglobal.com or visit here.