Major US banks are bracing for potential loan defaults. Facing growing economic uncertainty, they’re setting aside a massive amount of money to cover possible losses.
Billions in Provisions
According to S&P Global, JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup – the four biggest US banks – are collectively putting aside a staggering $34.87 billion for credit losses in 2025.
- JPMorgan Chase: Leads the pack with a whopping $12.87 billion provisioned. Their Q1 provision alone ($3.31 billion) exceeded expectations by $556 million.
- Citigroup: Comes in second, setting aside $10.69 billion.
- Bank of America: Plans to reserve $6.37 billion.
- Wells Fargo: Will hold $4.93 billion in reserve.
A Cautious Approach
While most banks, except JPMorgan Chase, have set aside less than initially anticipated, analysts remain cautious. Although banks seem confident in borrowers’ ability to repay, there’s a lack of clarity on the overall economic outlook. One analyst noted that banks’ reduced revenue forecasts might not be enough to handle potential future problems.
Disclaimer:
This information is for general knowledge and shouldn’t be considered investment advice. Always do your own research before making any financial decisions./p>