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Banks earnings lower due to the pandemic

Miguel A. Rodriguez
Miguel A. Rodriguez
14 Septembrie 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%. 

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Miguel A. Rodriguez
Miguel A. Rodriguez

Miguel a lucrat pentru instituții financiare importante, precum Banco Santander și Banco Central-Hispano. De asemenea, a publicat cărți despre Forex.