Three banking giants—JPMorgan Chase, Bank of America, and Wells Fargo—announced significant losses totaling $5.188 billion in the fourth quarter of the year. These losses represent loans deemed uncollectible after all attempts to recover the funds from customers failed.
Credit Card Debt Drives Losses
The majority of these losses stemmed from credit card debt. JPMorgan Chase reported the largest hit, writing off $2.4 billion, largely due to unpaid credit card balances. Bank of America followed with $1.5 billion in charge-offs, also primarily from credit cards. Wells Fargo reported $1.288 billion in losses, a combination of higher credit card defaults and losses in their commercial real estate portfolio.
Record Credit Card Debt
These losses come as US credit card debt reaches a record high of $1.21 trillion, according to the Federal Reserve Bank of New York. The combined losses for the three banks represent a slight increase of $188 million compared to the previous quarter and a $460 million increase year-over-year.
Despite Losses, Banks Still Profitable
Despite these substantial write-offs, all three banks reported strong overall earnings for the quarter. JPMorgan Chase boasted $14 billion in profit, Bank of America reported $6.7 billion, and Wells Fargo recorded $5.1 billion.
