According to the Federal Deposit Insurance Corporation’s (FDIC) latest statistics, US banks have been dumping billions in bad debts that they are officially giving up collecting.
The FDIC’s new Quarterly Banking Profile reports that US banks had reported net chargeoffs of $21.3 billion for the second quarter, mainly due to delinquent credit cards and soured commercial real estate loan.
This is the highest net quarterly charge-off since the second quarter 2013 and 20 basis point higher than the similar period last year, as customers battle to keep up with rising interest rates and inflation.
JPMorgan Chase revealed that it had incurred billions of net charges in the second quarter of this year, as did Wells Fargo Bank and Bank of America.
JPMorgan Chase reports that its net charges-offs in the second quarter of this year reached $2.2 billion, up from $1.4 in the same period last year.
Wells Fargo reports that its net chargeoffs jumped to $1.3 billion in the last quarter from $764 millions a year earlier.
Bank of America reports that its net chargeoffs have risen to $1.5 billion from $900 millions in the previous year.
According to the FDIC, the charge-off rates for US banks are now higher than pre-pandemic levels.
In Q2, the charge-off rates for credit cards were particularly high at 4.82%. This was an increase of thirteen basis points over the prior quarter.
The highest rate of credit card charges since the third quarter in 2011.
This data is in line with the findings of a report by the Philadelphia Federal Reserve. The Philadelphia Federal Reserve found that the amount of past-due credit card debts reached its highest ever level during the first quarter of the year according to historical records dating back to 2012.
The FDIC reports that the net income of all the 4,539 commercial banks and saving institutions insured by the FDIC for the second quarter was $71.5 billion. This represents an increase of $7.3 billion over the quarter before.
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Sources of Images include Pixabay Creative Commons & Midjourney
The post JPMorgan Chase Wells Fargo Bank of America Loses $5,000,000,000 In Push To Offload Rotten Debt As Credit Card Delinquencies Rise may be updated as new information becomes available.
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