Major US banks are seeing a huge jump in risky loans, according to a recent report. This means loans that are showing signs of trouble and might not be repaid.
The Numbers Are Up
The total amount of these “criticized” loans at three of the biggest banks – JPMorgan Chase, Wells Fargo, and Bank of America – hit a staggering $89.67 billion by the end of the third quarter of 2023. That’s the highest level since 2020.
- JPMorgan Chase: Saw a 26.3% increase year-over-year, reaching $26.01 billion in criticized loans.
- Wells Fargo: Experienced a 17.9% year-over-year increase, totaling $37.6 billion.
- Bank of America: Recorded a 15.2% year-over-year increase, reaching $26.06 billion.
This isn’t just a problem for these three giants. The overall amount of criticized loans at major US banks is also way up.
Smaller Banks Facing Similar Issues
The situation is even worse for some smaller banks. Four banks with over $50 billion in assets saw criticized loans increase by over 100%! One bank, Flagstar Financial, even saw a massive 338.6% increase.
What Does This Mean?
This surge in risky loans is a significant development. It suggests that the economy might be facing some headwinds, and that borrowers are struggling to repay their debts. While it’s not necessarily a sign of an immediate crisis, it’s definitely something to keep an eye on. It’s important to remember that this is a complex issue and further analysis is needed to fully understand the implications.
