Coca-Cola Considers Selling Costa Coffee Amid Financial Challenges
Coca-Cola is considering selling its Costa Coffee chain despite the potential for billions in losses, indicating a strategic shift or financial reconsideration.
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Potential Losses
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US Banking System Faces $541 Trillion Exodus in 'Severely Adverse' Scenario, Warns Federal Reserve
The Federal Reserve has warned that in a "severely adverse" scenario, over $541 billion will exit the US banking system. The annual bank stress test revealed that while large US banks would survive a severe recession, a group of 23 banking giants, including JPMorgan Chase, Bank of America, and Wells Fargo, would experience significant losses. These losses include $424 billion in loan losses, $18 billion in additional losses, $94 billion in trading and counterparty losses, and $5 billion in securities losses. Despite the potential losses, all 23 banks tested remained above their minimum capital requirements during the hypothetical recession.
US Banks Boost Reserves After Supporting First Republic
US banks that deposited $30bn in uninsured deposits into First Republic Bank in March plan to set aside about $100m each in first-quarter earnings in case of potential losses. JPMorgan Chase, Wells Fargo, Citigroup, and Bank of America were among the 11 lenders that bolstered First Republic after its shares plunged during the crisis triggered by the collapse of Silicon Valley Bank and Signature Bank. The move comes as major US banks begin reporting first-quarter earnings from Friday.
Pressure Mounts on Big Banks to Increase Reserves Amid First Republic's Example
The biggest US banks, including JPMorgan Chase, Wells Fargo, Citigroup, and Bank of America, are planning to boost their reserves by about $100 million each, following their effort to shore up ailing lender First Republic Bank last month. This move is tied to accounting rules covering potential losses.