Banks earnings lower due to the pandemic

By: Miguel A. Rodriguez

09:45, 14 September 2020

A despicable first quarter for the US banking sector

The pandemic's effects don't cease to show up and have a significant impact on the financial situation. 

The newest report from the Federal Insurance Corporation states that due to a collapsing economic activity, the lenders wrote off the mandatory debt payments and saved up billions of dollars to protect themselves from future losses. Almost 15% of US bank loans have been categorized as delinquent.

The US banks allocated $38.8 billion to protect themselves from possible future loan losses, a 280% increase compared to the same time last year.

Commercial banks and savings institutions reported first quarter earnings of $18.5 billion, a decrease of 69.6% compared to last year. The community banks had a net income of $4.8 billion. Banks that have assets worth over $10 billion accounted for 80% of the earnings, with top names such as JP Morgan, Bank of America, Wells Fargo, and Citigroup. The number of institutions that reported net losses increased by 7.3% in the past three months – the most significant increase since 2010.

On the other hand, the capital positions of banks increased by 8.5% to $15.8 trillion. Loans and leases went up 4.2% to $11 trillion. 

The FDIC report had an impact over the most important banks: JP Morgan opened lower by more than 0.50%, while Bank of America and Citigroup went down over 0.60% each. Wells Fargo slid 1.10%. 

As markets change, you should stay informed. Visit for more information!


Share this article

The information presented herein is prepared by and does not intend to constitute Investment Advice. The information herein is provided as a general marketing communication for information purposes only and as such it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.                                                                                                                            Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience, or current financial situation.Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance and forecasts are not reliable indicators of future results.