SALES, RENTALS & LAYAWAYS

PROTECTING EVERYTHING THAT HAS EVER BEEN OF VALUE TO YOU

Open 24/7/365

We Have A Life-Time Warranty /
Guarantee On All Products. (Includes Parts And Labor)

Banks Get Ready For Wave of Recession-Led Loan Defaults (#GotBitcoin?)

JPMorgan, Citigroup and Wells Fargo stockpile $28 billion to cover potential loan losses. Banks Get Ready For Wave of Recession-Led Loan Defaults (#GotBitcoin?)

The largest U.S. banks signaled that the worst of the coronavirus recession is yet to come, opting to stow away tens of billions of dollars to prepare for an expected wave of loan losses.

JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. said Tuesday they took large hits to their second-quarter profits to collectively stockpile $28 billion to cover losses as consumers and businesses start to default on their loans.

The provisions amount to a sharp increase above what they put away in the first three months of the year, reflecting a shift in their assumptions about the length and severity of the pandemic’s economic toll. JPMorgan, the largest U.S. bank by assets, said it put aside extra to prepare for an unemployment rate that remains at double digits well into next year and a slower recovery in gross domestic product than the bank’s economists assumed three months ago.

“This is not a normal recession,” said James Dimon, JPMorgan’s chief executive. “The recessionary part of this you’re going to see down the road.”

For years after the last financial crisis, banks made big profits lending to consumers and companies eager to take advantage of low interest rates. Heading into the current collapse, Americans had taken on record amounts of auto loans, credit-card debt and student loans. Corporate debt also reached record levels.

After governments shut down a host of businesses to slow the spread of coronavirus, the outlook for that debt grew murkier. Bank executives said Tuesday they saw signs of a nascent economic recovery in May after states opened up. Now, a new spike in coronavirus cases that caused a wave of shutdowns has them preparing for an extended downturn.

“The pandemic has a grip on the economy, and it doesn’t seem likely to loosen until vaccines are widely available,” Citigroup Chief Executive Michael Corbat said.

JPMorgan set aside $10.47 billion to cover potential loan losses, cutting its profit in half. Wells Fargo posted its first quarterly loss in more than a decade and socked away $9.57 billion to prepare for a wave of loan defaults. Citigroup’s profit fell 73%, weighed down by the $7.9 billion the bank set aside for an expected increase in soured loans.

Shares of JPMorgan rose 0.6%. Citigroup shares fell 3.9%, and Wells Fargo shares fell 4.6%.

Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. will report earnings later this week.

The economic collapse has been unusual in that banks have granted temporary pauses on payments for mortgages, auto loans and commercial loans. Also, the federal government has provided unprecedented stimulus to keep consumers afloat.

Executives said Tuesday the requests for more assistance have tailed off in recent months. Credit-card customers who had requested help were largely returning to paying instead of seeking more relief.

“It does appear the relief programs are working” Citigroup Chief Financial Officer Mark Mason told reporters.

But as relief measures roll off, banks are expecting trouble ahead.

All three banks added to their loan-loss reserves for both their commercial divisions and their consumer banks. All told, the three banks have stockpiled $83 billion for credit losses. Hard-hit industries like retail and hotels are already struggling financially, but executives said they now expect the downturn to hit a wide range of businesses.

“May and June will prove to be the easy months in terms of this recovery,” said Jennifer Piepszak, JPMorgan’s CFO. “Now we’re really hitting the moment of truth in the months ahead.”

Additionally, banks expect higher losses in consumer mortgages when payment deferrals end and higher credit-card losses due to elevated unemployment.

Even as the recession deepened in the second quarter, the S&P 500 rose 20%. In a sign of that rift, banks reported some of their best trading results in years. Trading revenue rose 79% at JPMorgan and 55% at Citigroup. Both banks did brisk business advising companies raising funds through debt and equity sales.

Executives at JPMorgan and Citigroup cautioned that second-quarter market revenues were abnormally high and trading likely would fall back to earth in the second half of the year.

So far, the pandemic has hit Wells Fargo the hardest. The bank, already struggling to dig out of a four-year-old fake-accounts scandal, had to manage the economic fallout while staying within strict regulatory confines. In addition to increasing its loan-loss provisions, it noted a recent rise in charge-offs tied to its oil-and-gas and commercial-real-estate portfolios.

“Our view of the length and severity of the economic downturn has deteriorated considerably,” said CEO Charles Scharf.

Banks Get Ready For,Banks Get Ready For,Banks Get Ready For,Banks Get Ready For,Banks Get Ready For,Banks Get Ready For,Banks Get Ready For,Banks Get Ready For,Banks Get Ready For,

Related Articles:

32% of U.S. Households Missed Their July Housing Payments

What You Need To Know About The New Small-Business Bankruptcy Laws

Police Wrestle With Surge In Crime In U.S. Cities Amid Defunding Efforts

Here’s An Investment That Perfectly Tracks The Economy

Fed, Treasury Disagreements Slowed Start of Main Street Lending Program

When A Texas Oil Boom Goes Busts

Trump Takes Cognitive Test And Can Identify A Rhino vs A Camel

Don’t Know How Much Stimulus Is Needed? Put It On Autopilot, Some Say

Colorado Police Chief Fires Three Officers Over Reenacted Chokehold Placed On Elijah Mcclain

Republicans Give Trump Labor Day Deadline To Turn Things Around. After That, He’s On His Own

Chapter 11 Business Bankruptcies Rose 26% In First Half of 2020

Chaotic Trump Administration Plus Russian Bounty Intelligence Equals Loss Of American Lives

Supreme Court Orders Restructuring of Consumer-Finance Watchdog

Reddit, Acting Against Hate Speech, Bans ‘The_Donald’ Subreddit

Class Action Lawsuit Alleges Visa Subsidiary Violated Privacy And Data Protections Of Venmo, Stripe, Square’s Cash App, Robinhood & More

Private Equity’s Trillion-Dollar Piggy Bank Holds Little For Struggling Companies (#GotBitcoin?)

TikTok Teens Overload Trump’s Online Store With Orders Only To Abandon Shopping Cart

Bill Gates Says Trump’s Lack Of Leadership Is Making Pandemic Picture ‘More Bleak Than I Would Have Expected’

Fed Stress Test Finds U.S. Banks Not Healthy Enough To Withstand “Few Quarters” Economic Downturn

Elizabeth Warren Was Right About Whacky Stockmarket Fundamentals (#GotBitcoin?)

Two Of The Latest High-Profile Trump Resignations

US Banks Have Seen A Record $2 Trillion Surge Of Deposits Since The Coronavirus Crisis Began

Trump Gets KPOP’d And Tic Toc’d As Teens Mobilized To Derail Trump’s Tulsa Rally

The Dangerous Secrets Our Working-From-Home Photos Reveal

New Decentralized Cybersecurity Solution Enables Passwordless Logins (#GotBitcoin?)

CIA’s ‘Lax’ Security Led To Massive Theft of Hacking Tools, Internal Report Finds

Signal Is A Truly Private Chat App Ideal For Protestors (#GotBitcoin?)

Maintain Your Privacy And Security During A Protest (#GotBitcoin?)

Borrower, Beware: Credit-Card Fraud Attempts Rise During The Coronavirus Crisis

Senate Vote Allows FBI Access To Your Browsing History Without A Warrant And What You Can Do About It

Report Says Chinese And Iranian Hackers Seek To Steal Coronavirus Research

28,000 GoDaddy Hosting Accounts Compromised

Some States Dabble In Online Voting, Weighing Pandemic Against Cybersecurity Concerns

Antonopoulos: Chainalysis Is Helping World’s Worst Dictators & Regimes (#GotBitcoin?)

Survey Shows Many BTC Holders Use Hardware Wallet, Have Backup Keys (#GotBitcoin?)

Blockfolio Quietly Patches Years-Old Security Hole That Exposed Source Code (#GotBitcoin?)

Apple iPhone May Be Vulnerable To Email (Mail) Hack

Gates Foundation, WHO And Wuhan Institute of Virology All Hacked!

Google Hack Requires That You Updated Chrome Browser Now To Version: 81.0.4044.113

Privacy-Oriented Browsers Gain Traction (#GotBitcoin?)

Can Blockchain Technology Counter US Anti-Message Encryption Bill? (#GotBitcoin?)

Chinese Military Turns To U.S. University To Conduct Covert Research

CIA Has Had Keys To Global Communication Encryption Since WWII

Hostile Spies Target U.S. With Cyber, Encryption, Big Data, Report Finds

Hackers Stole And Encrypted Data of 5 U.S. Law Firms, Demand 2 Crypto Ransoms

Ex-CIA Engineer Goes On Trial For Massive Leak

Multi One Password (Portable App)

After He Fell For A $40K Phone Scam, His Bank Offered To Help—If He Stayed Quiet (#GotBitcoin?)

Your PGP Key? Make Sure It’s Up To Date

Bezos’ Phone Allegedly Hacked By Account Associated With Crown Prince

Major Companies Shared Vulnerability Used In Travelex Cyberattack (#GotBitcoin?)

Microsoft Releases Patch To Patch Windows Flaw Detected By NSA

VPN Tier List 2020 (Comparison Table)

SEC Market-Surveillance Project Hits Snag Over Hacker Fears

Inside China’s Major US Corporate Hack

Twitter Bug Exposed Millions of User Phone Numbers

U.S. Cyber Officials Give Holiday Shopping Advice For Consumers

Is Cayla The Toy Doll A Domestic Spy?

Google’s “Project Nightingale” Faces Government Inquiry Over Patient Privacy.

Which Password Managers Have Been Hacked?

DNS Over HTTPS Increases User Privacy And Security By Preventing Eavesdropping And Manipulation

Russia Steps Up Efforts To Shield Its Hackers From Extradition To U.S.

Barr Revives Debate Over ‘Warrant-Proof’ Encryption (#GotBitcoin?)

Should Consumers Be Able To Sell Their Own Personal Data?

Doordash Says Security Breach Affected Millions Of People (#GotBitcoin?)

Fraudsters Used AI To Mimic CEO’s Voice In Unusual Cybercrime Case (#GotBitcoin?)

Pearson Hack Exposed Details on Thousands of U.S. Students (#GotBitcoin?)

Cyber Hack Got Access To Over 700,000 IRS Accounts (#GotBitcoin?)

Take A Road Trip With Hotel Hackers (#GotBitcoin?)

Hackers Prove The Insecurity Of Trump’s Border Security By Stealing Photos Of Travelers’ Faces (#GotBitcoin?)

Hackers Target Loyalty Rewards Programs (#GotBitcoin?)

Taxpayer Money Finances IRS “Star Trek” Parody (#GotBitcoin?)

IRS Fails To Prevent $1.6 Billion In Tax Identity Theft (#GotBitcoin?)

IRS Workers Who Failed To Pay Taxes Got Bonuses (#GotBitcoin?)

Trump DOJ Declines To Charge Lois Lerner In IRS Scandal (#GotBitcoin?)

DMV Hacked! Your Personal Records Are Now Being Transmitted To Croatia (#GotBitcoin?)

Poor Cyber Practices Plague The Pentagon (#GotBitcoin?)

Tensions Flare As Hackers Root Out Flaws In Voting Machines (#GotBitcoin?)

3-29-2019 FBI Retools To Counter Cyber Threats, 4-12-2019 Thousands Of FBI Personal Data Is Stolen (#GotBitcoin?)

Overseas Traders Face Charges For Hacking SEC’s Public Filings Site (#GotBitcoin?)

Group Hacks FBI Websites, Posts Personal Info On Agents. Trump Can’t Protect You! (#GotBitcoin?)

SEC Hack Proves Bitcoin Has Better Data Security (#GotBitcoin?)

Hackers Prove The Insecurity Of Trump’s Border Security By Stealing Photos Of Travelers’ Faces (#GotBitcoin?)

Our Facebook Page

Your Questions And Comments Are Greatly Appreciated.

Monty H. & Carolyn A.

Go back

Leave a Reply