Banks will become increasingly impatient with corporate customers whose loans are not performing, a senior banker said yesterday. NabCapital head of leveraged and acquisition finance Greg Lapham said the view within banks was that there was a limited amount of capital and they were keen not to lose any.Speaking at the mergermarket Australian M&A Forum in Sydney, Lapham said current conditions could encourage greater activity from hedge funds looking to buy up distressed debt.He said the shutdown in global debt capital markets was continuing to have repercussions."We have seen $500 billion written down by banks. No one is sure what the extent of the exposure is. It could be $500 billion more."About $350 billion has been raised by banks for recapitalisation. The big issue is whether there is more capital to provide to banks."The bulk of the recent HBOS issue was left in the hands of the underwriters. Investment banks with weak balance sheets might not be prepared to underwrite issues, and balance sheets need more capital."Lapham said about $100 billion in LBO deals worldwide were still looking to be sold.Corporate bond issuance has fallen away to almost nothing in Australia and in overseas markets. About $25 billion of bonds mature in the domestic corporate bond market this year but that number jumps to $40 billion next year; close to $45 billion in 2010; and almost $50 billion in 2011.Lapham said: "Those corporates will be looking to banks and the equity market. It will be a tall order."Speaking at the same conference, Fortress Investment Group director Adam Francis said the US commercial property market, which had $800 billion of loans tied up in commercial mortgage backed securities, was starting to head in the same direction as the mortgage market, with loose loans written in 2006 and 2007 starting to go bad.Francis said another concern was the CDS market. "This is a very large market with about $US45 trillion on issue."It is an unregulated market with a lot of those securities in the hands of investors who may not have the capital to meet claims if they arise."Speakers noted the big slowdown in business lending in Australia but could not agree on whether banks were rationing credit or demand had collapsed. Francis said:  "Banks are rationing. They are concentrating on their A list and they are doing that because they are constrained."Westpac chief economist Bill Evans said: "Six months ago we had quarterly growth in business lending at 25 per cent annualised. Now it is growing at four per cent annualised. "There is supply. Banks are still borrowing and they have grown their retail deposits. I see demand collapsing."