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  • Frank Tian

US Banks Q2 Reserves

The horizon is stormy, but no clear sign of the severity yet.

That is the message from the big banks in this earning season.

The largest 4 banks in the U.S. - JP Morgan, Bank of America, Citi, and Wells Fargo - essentially kept their allowances for credit losses flat in Q2.

The collective reserves of the 4 banks are up 2% Q/Q, or $1.0 billion.

A quick timeline:

🟥 In 2020, big 4 banks quickly raised the reserves by 76% or $45 billion, in fear of the severe impact of the pandemic.

🟩 In the 6 quarters since Q4 2020, 91% of the reserves build-up or $41 billion was gradually released. The worst was avoided with various public relief and private forbearance programs.

🟨 In Q2 2022, after the slight increase, the total reserves are 8.5%, or $5 billion more than the pre-pandemic level in Q1 2020.


Company quarterly financial releases.

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