Bank of America, Citigroup and Goldman Sachs are reporting $4.139 billion in losses as lenders write off mounting debts that customers can’t honor.
In its latest earnings report, Citigroup says its net credit losses, which are debts that the firm does not expect to collect, hit $2.28 billion in Q2 of this year.
The figure represents a nearly $780 million increase from the $1.504 billion in delinquent debts recorded during the same quarter in 2023.
Citigroup CEO Jane Fraser says she’s starting to see signs that the average American consumer is cutting back on spending, reports Bloomberg.
“The consumer is slowing. A lot of the spending and the growth areas we are seeing, in the underlying numbers, is being driven by the affluent customers.”
Meanwhile, BofA says that its net charge-offs reached $1.5 billion in Q2 of 2024 – a 66% rise from the $900 million witnessed in Q2 2023.
The bank also reports that its provision for credit losses jumped by $400 million from $1.1 billion in Q2 of 2023 to $1.5 billion last quarter.
As for Goldman Sachs, the lender says its net charge-offs hit $359 million last quarter.
Other banking giants in the US are also reporting massive losses due to debts that have soured.
JPMorgan Chase says it lost $2.2 billion last quarter due to uncollected debts while Wells Fargo recorded $1.3 billion in net charge-offs in Q2 of this year.
In May, the Federal Reserve Bank of New York (FDNY) raised the alarm on the rising levels of US household debt. According to FDNY’s Center for Microeconomic Data, US household debt reached $17.69 trillion in Q1 of this year, a $640 billion surge on a year-over-year basis.
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