The biggest US banks’ profit lines suffer as consumers fail on loans totaling billions of dollars.
The Financial Times reports that JPMorgan Chase, Bank of America (BofA), Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley show up having written off a total of $5 billion in funds in Q2 of the current year as clients feel the effects of inflation and increased interest rates. This information was gathered by Bloomberg.
In essence, the write-offs signify that the banks have chosen to formally acknowledge significant losses in the market value of the investments listed on the balance sheets.
The big banks mention credit card debt as the main reason for their substantial write-offs.
This past quarter, JPMorgan Chase took losses of $1.1 billion in bad credit card debt, a rise of more than 66% over the same period the previous year.