Get the scoop on finance - sign up for mobile alerts
Financeflux
| On
August 18, 2023

US Banks Suffer $18,900,000,000 in Losses As JPMorgan Chase and Capital One Take Big Hits From Bad Loans: Report

By Alex Richardson

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.

ADVERTISEMENT

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.

Source: BankRegData/Financial Times

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.”

ADVERTISEMENT

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.

Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on X, Facebook and Telegram
Surf The Daily Hodl Mix

&nbsp
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated Image: Midjourney