Top American Banks Report Billions in Losses Due to Rising Bad Debts

Major U.S. banks are grappling with significant financial losses due to rising unpaid debts. Bank of America, Citigroup, and Goldman Sachs have reported combined losses of $4.1 billion.

Citigroup revealed in its recent earnings report that it faced $2.28 billion in net credit losses for Q2, up by $780 million from the previous year. CEO Jane Fraser noted a slowdown in consumer spending, especially among average Americans, with growth now primarily driven by wealthier clients.

Bank of America also reported substantial losses, with net charge-offs reaching $1.5 billion for Q2, a dramatic 66% increase from the previous year. The bank’s reserve for credit losses also rose significantly to $1.5 billion.

Goldman Sachs disclosed $359 million in net charge-offs for the last quarter. Other large banks, including JPMorgan Chase and Wells Fargo, have similarly struggled, with JPMorgan reporting $2.2 billion in losses and Wells Fargo $1.3 billion in charge-offs.

The Federal Reserve Bank of New York recently warned about escalating U.S. household debt, which surged to $17.69 trillion in the first quarter of this year, marking a $640 billion increase from the previous year.