All articles tagged with #loan losses
Originally Published 2 months ago — by Reuters
U.S. regional banks are under scrutiny as recent loan losses and fraud issues raise concerns about sector-wide credit risks, with investors reacting to signs of potential deterioration in asset quality and broader financial stability.
Originally Published 2 years ago — by CNBC
JPMorgan Chase is set to report fourth-quarter earnings, with Wall Street expecting earnings per share of $3.32 and revenue of $39.78 billion. Analysts will closely watch for insights on how banks fared amid volatile interest rates and rising loan losses. CEO Jamie Dimon's comments on the economy and banks' efforts to manage capital requirements will also be of interest. Shares of JPMorgan jumped 27% last year, outperforming its peers, and other major banks are scheduled to release their results later in the day.
Originally Published 2 years ago — by Yahoo Finance
Bank of Nova Scotia (Scotiabank) reported lower-than-expected profits for the fiscal fourth quarter as it set aside more money than anticipated for potential loan losses. The bank's provisions for credit losses totaled C$1.26 billion ($925 million), higher than the C$870 million analysts had predicted. Scotiabank attributed the higher provisions to economic turmoil in both its Canadian and Latin American operations. The bank also reported lower capital-markets earnings due to slower trading activity. Despite the challenging financial year, CEO Scott Thomson expressed confidence in increased earnings for 2024 driven by productivity initiatives and a more stable rate environment.
Originally Published 2 years ago — by Yahoo Finance
Several regional banks, including Zions, Discover Financial, and Truist, reported significant drops in profit during the third quarter due to higher deposit costs and rising loan losses. While regional banks have stabilized since the spring, profitability remains a challenge as high interest rates increase deposit expenses and make it harder for borrowers to repay loans. New capital requirements proposed by US regulators also threaten future profits. Regional bank stocks have underperformed the S&P 500 this year. Net interest income, a key measure of profitability, is being squeezed by higher interest on deposits.
Originally Published 2 years ago — by Yahoo Finance
Big banks like JPMorgan Chase, Citigroup, and Wells Fargo are benefiting from higher interest rates, leading to increased earnings in the third quarter. Their advantage lies in leveraging these rates by charging more for loans while paying less for deposits compared to smaller rivals. However, there are signs that borrowers are starting to struggle, as evidenced by increased loan write-offs. Citigroup's CEO warned of a cautious consumer and expects credit card losses to reach pre-COVID levels by year-end. Wells Fargo's CEO noted declining loan balances and deteriorating charge-offs. JPMorgan's CEO expressed concerns about consumers spending down their excess cash buffers amid elevated inflation risks. Smaller lenders like PNC are also facing challenges in navigating higher rates, with profits and net interest income falling.
Originally Published 2 years ago — by CNBC
JPMorgan Chase is set to report its third-quarter earnings, with analysts expecting earnings per share of $3.96 and revenue of $39.65 billion. The bank's performance will be closely watched for insights into how the industry has fared amid surging interest rates and rising loan losses. JPMorgan has managed volatile rates well so far this year, but other banks have struggled. Higher rates have impacted banks by increasing deposit costs, creating unrealized losses on bonds, and dampening demand for mortgages and corporate loans. Investment banking fees and trading revenue are expected to remain subdued. Analysts will also be interested in CEO Jamie Dimon's outlook on the economy and the banking industry.
Originally Published 2 years ago — by CNBC
American banks, including JPMorgan Chase, Citigroup, and Wells Fargo, are expected to report lower earnings for the third quarter due to shrinking margins and declining loan demand caused by rising interest rates. Higher rates are also anticipated to lead to losses on banks' bond portfolios and funding pressures. While some analysts see a potential short squeeze and relief rally for bank stocks during earnings season, concerns remain about the impact of higher rates on banks' balance sheets, particularly for regional lenders and potential losses in commercial real estate and industrial loans.
Originally Published 2 years ago — by The Daily Hodl
US banks, including JPMorgan Chase and Capital One, have collectively suffered losses of $18.9 billion in the second quarter of this year due to soured loans caused by soaring interest rates. The banks are experiencing higher rates of charge-offs, or losses on loans deemed unrecoverable, compared to previous months and years. Capital One's CEO attributes the losses to the end of an unprecedented credit environment that favored borrowers. Moody's has also downgraded ratings for several regional banks and is considering further downgrades due to potential deposit flight and declining profitability. Banks are preparing for continued loan losses and have set aside $21.5 billion in contingency funds.
Originally Published 2 years ago — by Financial Times
US banks are expected to report the largest increase in loan losses since the start of the pandemic, as the economic impact of Covid-19 continues to affect borrowers' ability to repay debts. This comes as banks prepare to release their financial reports, with analysts predicting a surge in provisions for loan losses as a result of the ongoing economic uncertainty.
Originally Published 2 years ago — by Financial Times
Big US banks are expected to report their largest increase in loan losses since the start of the pandemic, reflecting the ongoing financial impact of the crisis. As banks release their earnings reports, it is anticipated that they will reveal a significant jump in provisions for loan losses, highlighting the challenges faced by borrowers during this period of economic uncertainty.
Originally Published 2 years ago — by The Wall Street Journal
Regional banks in the US are struggling to keep up with larger banks due to the economic slowdown and low interest rates. These banks are also facing higher loan losses, which is putting pressure on their profitability. Despite efforts to cut costs and diversify their businesses, regional banks are finding it difficult to compete with their larger counterparts.
Originally Published 2 years ago — by Reuters
Shares of US regional banks PacWest Bancorp and Western Alliance Bank fell as the demise of First Republic Bank triggered investor concerns about the financial health of other mid-sized lenders. The KBW Regional Banking Index fell 5.52%, hitting its lowest since December 2020. Investors fear the latest turmoil could spread to other regional banks. The exposure of regional banks to the commercial real estate sector, particularly office buildings that currently have high vacancy rates, has further heightened investor concerns that loan losses could pile up and exacerbate the current crisis amid rising interest rates.
Originally Published 2 years ago — by Yahoo Finance
Truist Financial Corp reported a Q1 profit that missed Wall Street estimates as it set aside $502 million in provisions for credit losses due to increased economic uncertainty. Average deposits in the first quarter came in at $408.5 billion, down 1.2% from the previous quarter, as customers chased higher-rate alternatives after the banking crisis in March shook faith in the industry's stability. Truist earned $1.05 per share in the first quarter ended March 31, missing estimates of $1.14 per share.
Originally Published 2 years ago — by Reuters
Citigroup's Q1 profit beat expectations as net interest income rose 23% to $13.3 billion, but the bank also set aside $241 million to cover potential loan losses. CEO Jane Fraser said the bank is preparing for a shallow recession later this year, and expects more clients to fall behind on payments in the coming quarters. Citigroup has already tightened lending standards for consumers and is monitoring risks in the banking sector, especially regional banks, leveraged lending, and commercial real estate. The bank saw a pickup in deposits in March coming mainly from corporations, and expressed cautious optimism about a recovery in investment banking.
Originally Published 2 years ago — by CNBC
Citigroup reported better-than-expected revenue and rising net income for Q1, with personal banking revenue up 18% YoY and fixed income markets revenue up 4% YoY. However, the bank's executives expressed caution about the uncertain outlook for the US economy and potential credit contraction. Citigroup's stock rose about 4% following the earnings report. The bank also closed two divestitures during the quarter as part of a broader restructuring plan away from international retail banking.