How big US banks have managed bad loan reserves since the pandemic

07/11/2022

2 minutes read

2022.07.11 17:07

How big US banks have managed bad loan reserves since the pandemic

Budrigannews.com – The big six U.S. banks face a tough second quarter earnings season due to a hit from increased loan loss reserves, as the pandemic recovery gives way to a possible recession.

Though consumer spending trends remain strong, the looming threat of a recession and soaring inflation are expected to test the strength of U.S. consumers and companies.

Below is an outline of how banks have managed their reserves since 2020, when the COVID-19 pandemic forced them to set aside billions of dollars to account for potential loan losses, most of which did not materalize thanks to government stimulus packages.

JPMorgan Chase & Co (NYSE:JPM)

Quarter Reserves/p Reserves/p

rovisions rovisions

released built

Q1 2022 $902

million

Q4 2021 $1.8 –

billion

Q3 2021 $2.1 –

billion

Q2 2021 $3 billion –

Q1 2021 $5.2 –

billion

Q4 2020 $2.9 –

billion

Q3 2020 $569 –

million

Q2 2020 – $8.9

billion

Q1 2020 – $6.8

billion

Bank of America Corp (NYSE:BAC)

Quarter Reserves/p Reserves/p

rovisions rovisions

released built

Q1 2022 $362 –

million

Q4 2021 $851 –

million

Q3 2021 $1.1 –

billion

Q2 2021 $2.2 –

billion

Q1 2021 $2.7 –

billion

Q4 2020 $828 –

million

Q3 2020 – $417

million

Q2 2020 – $4 billion

Q1 2020 – $3.6

billion

Goldman Sachs Group Inc (NYSE:GS)

Quarter Reserves/p Reserves/p

rovisions rovisions

released built

Q1 2022 – $561

million

Q4 2021 – $344

million

Q3 2021 – $175

million

Q2 2021 $92 –

million

Q1 2021 $70 –

million

Q4 2020 – $293

million

Q3 2020 – $278

million

Q2 2020 – $1.6

billion

Q1 2020 – $937

million

Citigroup Inc (NYSE:C)

Quarter Reserves/p Reserves/p

rovisions rovisions

released built

Q1 2022 $138 –

million

Q4 2021 $1.4 –

billion

Q3 2021 $1.2 –

billion

Q2 2021 $2.4 –

billion

Q1 2021 $3.9 –

billion

Q4 2020 $1.5 –

billion

Q3 2020 – $436

million

Q2 2020 – $5.6

billion

Q1 2020 – $4.9

billion

Wells Fargo (NYSE:WFC) & Co

Quarter Reserves/p Reserves/p

rovisions rovisions

released built

Q1 2022 $787 –

million

Q4 2021 $452 –

million

Q3 2021 $1.4 –

billion

Q2 2021 $1.26 –

billion

Q1 2021 $1.05 –

billion

Q4 2020 $179 –

million

Q3 2020 – $769

million

Q2 2020 – $9.5

billion

Q1 2020 – $4 billion

Morgan Stanley (NYSE:MS)

Quarter Reserves/p Reserves/p

rovisions rovisions

released built

Q1 2022 – $57

million

Q4 2021 – $5 million

Q3 2021 – $24

million

Q2 2021 – $73

million

Q1 2021 $98 –

million

Q4 2020 – $4 million

Q3 2020 – $111

million

Q2 2020 – $239

million

Q1 2020 – $407

million