Bad news for some of the biggest banks in the US: JPMorgan Chase and Wells Fargo are reporting huge losses from customers who can’t pay back their loans.
JPMorgan Chase saw a whopping $2.2 billion in “charge-offs” – basically, bad debt they don’t expect to get back – in the second quarter. That’s a big jump from the previous quarter and last year.
Wells Fargo isn’t doing much better. Their charge-offs skyrocketed by 70% to $1.3 billion in the second quarter. Wells Fargo’s CFO says that many customers are struggling with rising credit card balances and dwindling savings, especially those with lower incomes.
It’s not just about bad loans. JPMorgan also lost $500 million on bad mortgage investments.
This isn’t a new problem. Banks have been warning about rising credit card debt and trouble in the commercial real estate market for a while now.
Despite the losses, both banks still made a profit. Wells Fargo earned $4.9 billion, but their stock price dropped after their earnings fell short of expectations. JPMorgan reported a $13.1 billion profit, and their stock is doing pretty well.
The bottom line: It seems like the rising cost of living is taking a toll on some Americans, and the big banks are feeling the pain. /p>
