US Banks Suffer $18,900,000,000 in Losses As JPMorgan Chase and Capital One Take Big Hits From Bad Loans: Report
America’s biggest banks are taking hits to their bottom line as soaring interest rates cause billions of dollars in loans to fall apart.
JPMorgan Chase, Capital One and others lost a combined $18.9 billion in the second quarter of this year due to soured loans, reports the Financial Times.
The banks are facing “charge-offs,” or losses on loans that have now been designated as unrecoverable at a 17% higher rate than the previous three months, and a 75% higher rate than 2022.
In an earnings call last month, Capital One CEO Richard Fairbank said that the US is coming out of an “unprecedented” credit environment that favored borrowers, and that some type of consequence was inevitable.
“We have to remember that the credit performance we saw over the past three years was unprecedented…
So we believe there’s some catching up that happens on the other side of that, especially for consumers who might otherwise have charged off over the past three years.”
Banks are now preparing for loan losses to continue rising, and have already set aside $21.5 billion in contingency funds for future potential losses.
The new numbers on loan losses come after Moody’s cut its ratings of 10 regional banks and announced it’s considering whether to downgrade a number of additional big lenders due to the potential for further deposit flight and “eroding” profitability.
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The post US Banks Suffer $18,900,000,000 in Losses As JPMorgan Chase and Capital One Take Big Hits From Bad Loans: Report appeared first on The Daily Hodl.
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Author: Alex Richardson
