The two largest banks in the US are declaring a loss on $4.5 billion in debts that customers are unable to pay.
JPMorgan Chase says its net charge-offs, which are debts that the bank does not expect to receive, hit $2 billion in the first quarter of this year, reports Reuters.
That’s nearly twice the amount of unrecoverable debt compared to the same quarter last year.
Meanwhile, Bank of America reported $1.5 billion in net charge-offs, a surge from $807 million a year prior.
BofA says those losses stem mainly from credit card debt that will likely never be paid.
“Bank of America is seeing ‘cracks’ in the finances of borrowers with below-prime credit scores whose household spending is affected by higher interest rates and inflation, Chief Financial Officer Alastair Borthwick told analysts on an earnings call…
While lenders earn money from interest payments, they seek to avoid situations in which customers fall so far behind on loans that they have to be written off.”
Net charge-offs are also on the rise at Citigroup and Wells Fargo as arecent poll from the Federal Reserve findsmost banks are now tightening lending standards for most types of loans.
“Banks reported tighter standards and weaker demand for home equity lines of credit (HELOCs). Moreover, for credit card, auto, and other consumer loans, standards reportedly tightened, and demand weakened on balance.”
Despite the losses, both JPMorgan Chase and Bank of America say their balance sheets are sound.
JPMorgan Chase earned $49.6 billion in profit last year, while Bank of America earned $24.9 billion.
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FAQs
JPMorgan Chase and Bank of America Suffer $4,500,000,000 in Losses As 'Unrecoverable Debt' Soars: Report. The two largest banks in the US are declaring a loss on $4.5 billion in debts that customers are unable to pay.
Is JP Morgan Bank in trouble? ›
JPMorgan Chase's odds of distress is less than 3% at the moment. It is unlikely to undergo any financial crunch in the next 24 months. JPMorgan Chase's Odds of distress is determined by interpolating and adjusting JPMorgan Altman Z Score to account for off-balance-sheet items and missing or unfiled public information.
Is Chase going under? ›
The Probability of Bankruptcy of JPMorgan Chase & Co (JPM) is 3.8% . This number represents the probability that JPMorgan will face financial distress in the next 24 months given its current fundamentals and market conditions.
Is JPMorgan Chase financially stable? ›
Financial Strength
We think JPMorgan Chase is in sound financial health. Its common equity Tier 1 ratio stood at 15.0% as of December 2023, versus a fully phased-in minimum of 11.9% (based on 2023 SCB results and an estimated 4.5% GSIB surcharge for 2024).
Is my money safe at JPMorgan Chase? ›
SEC Rules and Regulations provide customer protection
JPMS maintains such securities in its possession or in a location that has the controls required by the SEC to protect such securities from claims of third parties, in conformity with the SEC rules.
Why is Chase bank suing me? ›
If you have been sued by Chase Bank, it means that they have taken legal action against you in an attempt to collect a debt that they claim you owe.
What is the controversy with JPMorgan Chase? ›
JPMorgan Chase, the largest bank in the US, has faced allegations of fraud, manipulation, and costly mortgage-related settlements, raising concerns about its ethical practices and impact on the public.
Which banks are in danger of failing? ›
The banks of greatest concern are Flagstar Bank and Zion Bancorporation, according to the screener. Flagstar Bank reported $113 billion in assets with a total CRE of $51 billion. The bank, however, only had $9.3 billion in total equity, making its total CRE exposure 553% of its total equity.
Which is the top No. 1 bank in the world? ›
List of Top 10 Largest Banks in the World 2024
| Rank | Bank | Headquarters |
|---|
| 1 | JPMorgan Chase | New York, USA |
| 2 | Bank Of America | North Carolina, USA |
| 3 | ICBC Limited | Beijing, China |
| 4 | Wells Fargo | California, USA |
6 more rowsJan 29, 2024
Here are the specific locations where Chase Bank branches are set to close in 2024: California: Riverside, Citrus Heights, Fresno, Burbank, San Lorenzo, Los Angeles. Chicago: Two locations in Chicago. Colorado: Denver.
If there's suspicious activity or suspected fraud, your issuer may freeze or close your account. This activity can include: Unusual surges in account activity. Large amounts of money withdrawn.
What happens if Chase Bank fails? ›
If a bank fails, the FDIC is in charge of managing its assets. You'll have to wait until your money is moved to another FDIC-insured bank or mailed to you as a check in order to have access to it.
Is Chase a good or bad bank? ›
With thousands of branches and a highly rated digital banking platform, it's an accessible choice for personal banking services. In addition to numerous deposit accounts, Chase offers several loan, credit and investment products, making it a single stop for many personal finance needs.
Is JPMorgan Chase better than Bank of America? ›
Chase wins the battle of savings accounts, with three options compared to Bank of America's one. All of Chase's accounts also don't have a minimum opening deposit while Bank of America requires you to have $100 to open an account. That said, waiving your monthly fee at Bank of America may be easier.
What are JPMorgan Chase weaknesses? ›
Weaknesses. Regulatory and Compliance Risks: As a highly regulated entity, JPMorgan Chase & Co faces significant compliance risks. The 10-K filing highlights the complexity of adhering to various laws and regulations, which can lead to increased costs and operational constraints.
How much debt does JPMorgan Chase have? ›
Total debt on the balance sheet as of June 2024 : $441.33 B
According to JPMorgan Chase's latest financial reports the company's total debt is $441.33 B. A company's total debt is the sum of all current and non-current debts.
Was there a breach at Chase Bank? ›
JPMorgan Chase & Co. has confirmed that it recently suffered a cyber-attack that compromised its systems, although it's not sharing many details about the incident.
Did Chase Bank support slavery? ›
20 -- J.P. Morgan Chase & Co. filed a disclosure statement Thursday with the city of Chicago acknowledging that two of its predecessor banks received thousands of slaves as collateral prior to the Civil War.
What Bank did JP Morgan merge with? ›
History. JPMorgan Chase, in its current structure, is the result of the combination of several large U.S. banking companies that merged since 1996, combining Chase Manhattan Bank, J.P. Morgan & Co., and Bank One, as well as asset assumptions of Bear Stearns, Washington Mutual, and First Republic.
