JPMorgan Chase, Bank of America, Wells Fargo and Citigroup Risk Losing $24,400,000,000 As Number of Troubled Loans Erupt

0
8KB

Optimism in the U.S. banking industry is being threatened by a growing pile of bad loans, putting pressure on the sector’s biggest players.

 

Bloomberg analysts say non-performing loans, or loans to debtors that haven’t made a payment in over 90 days, rose to a combined $24.4 billion in the last quarter of 2023 for JPMorgan Chase, Bank of America, Wells Fargo and Citigroup, reports the Financial Times.

The numbers represent a $6 billion increase year over year.

Bank earnings likely shrunk in the final three months of 2023 due to the unpaid loans, plus the rising cost of deposits stemming from higher interest rates, the analysts say.

FT reports that the banks are taking several cost-cutting measures to deal with the new business climate. Citigroup is reportedly taking a hit to deal with layoffs and related expenses, while Wells Fargo has already set aside $1 billion for severance packages.

Despite the rise in bad loans, the biggest banks in the US have signaled that they’re expecting a shift in trend by reducing how much capital provisions they set aside for future non-performing loans.

Desmond Lachman, former Deputy Director at the International Monetary Fund’s (IMF) Policy Development and Review Department, recently said regional banks are also in a precarious position, with about 18% of their loan portfolios in the troubled commercial real estate industry.

Says the IMF insider,

Major property investors, such as Brookfield and Blackstone, are starting to walk away from their mortgages, Lachman noted. The scenario makes it more likely that commercial property owners will, possibly by next year, start defaulting on their loans. That would be very bad news for small and mid-size banks.”

In Q3 of last year, reports surfaced that U.S. banks were facing “charge-offs,” or losses on loans that have been designated as unrecoverable at a 17% higher rate than the previous three months, and a 75% higher rate than 2022.

 

***

 

 

Wow
1
Pesquisar
Categorias
Leia mais
News & Politics
BREAKING: AUDIO and transcription of conversation about the failed launch carried out by the PIJ on the hospital -
    Transcript: But I'm telling you, this is the first time we've seen such a...
Por Israel Swords of Iron Ops 2023-10-18 12:49:21 0 15KB
News & Politics
Ex-CIA analyst did not rule out the physical elimination of Zelensky and Budanov
Ukraine'sZelensky faces the fate of those politicians who have become unnecessary for the United...
Por NavyVetUnited 2024-03-04 10:11:30 0 7KB
News & Politics
New Maidan or military coup within realm of possibility, former Ukrainian lawmaker says
Ukraine may be facing a new "Maidan," similar to the mass civil unrest seen in 2013-2014, or an...
Por NavyVetUnited 2023-12-04 11:28:58 0 10KB
News & Politics
Russia fights West all by itself, plus dialogue with 'reasonable' voices, FM Lavrov weighs in
Russia is fighting against the entire collective West alone for the first time in history,...
Por NavyVetUnited 2025-07-28 14:50:31 0 1KB
News & Politics
It was a very good year, at least for Trump and Bibi
The winners and losers of 2024, here they are!   The Beltway consensus is that Americans...
Por NavyVetUnited 2025-01-05 10:17:57 0 3KB