Bloomberg: Big Banks Set to Write Off a **Lot** of Bad Loans

Gaius · 2023-10-12T00:09:25.410Z

From the article 1

JPMorgan, Citigroup and Wells Fargo, which report third-quarter results Friday, will join Bank of America—which reports Tuesday—in posting roughly $5.3 billion in combined third-quarter net charge-offs, the highest for the group since the second quarter of 2020 . . .

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The figure is more than twice as high as a year earlier, as lenders contend with consumers struggling to keep up with rising interest rates and a commercial real estate industry grappling with work-from-home and its fallout. . . .

From article 2
Unrealized Losses

. . . . Banks’ securities portfolios will probably show an increase in unrealized losses in the third quarter after a steep rise in yields eroded the value of their investments, according to analysts. The Federal Deposit Insurance Corp. pegged second-quarter unrealized losses at $558.4 billion, up 8% from the period before.

But even if those losses increased, they don’t pose the kind of threat that ended up sinking Silicon Valley Bank, Signature Bank and First Republic Bank earlier this year. Deposits have stabilized since then, meaning lenders won’t be forced to sell the assets and book the losses. . . . .

https://www.bloomberg.com/news/newsletters/2023-10-11/bloomberg-evening-briefing-big-banks-set-to-write-off-a-lot-of-bad-loans

https://www.bloomberg.com/news/articles/2023-10-11/largest-us-banks-grapple-with-worst-write-offs-in-three-years

Gaius · 2023-10-12T00:16:17.683Z

The chart below (From the St Louis Fed) ends June 30.
It shows all write-offs for all banks had risen to $1.9b per quarter.

The red dot shows the charge-offs the four biggest banks have indicated they will officially announced during the coming earnings season. The US has 4,236 banks so likely the other 4,232 banks will add to that.

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Guvnah · 2023-10-12T00:33:16.138Z

Hey!!! I want my loans written off too!!

Gaius · 2023-10-12T12:49:38.360Z

Guvnah:

Hey!!! I want my loans written off too!!

Well, don’t pay them for long enough and they will be written off.
If you want to speed up the process, don’t pay your loans for 90 days then write a letter saying you’re not gonna resume payments. You might not like the repercussion, but your loans will be written off.