tl;dr
JPMorgan Chase, Wells Fargo, Bank of America, and Citi are collectively unloading billions of dollars in bad debt, primarily driven by credit card delinquencies and soured consumer loans. In Q3 of this year, the four largest banks recorded $6.9 billion in net charge-offs, with significant percentage...
Major US banks collectively recorded $6.9 billion in net charge-offs in Q3 of 2023 due to credit card delinquencies and soured consumer loans. JPMorgan's net charge-offs surged to $2.087 billion, up nearly 40% from Q3 of 2022. Wells Fargo reported net charge-offs of $1.111 billion in Q3, a 54% increase from the previous year. Citi's net credit losses reached $2.172 billion, up over 32% from the same period last year. BofA's net charge-offs hit $1.534 billion in Q3, a 64% increase from a year ago. US credit card rates hit a record high of 23.4% in August, with total outstanding credit card debt soaring to $1.36 trillion. Credit card serious delinquency rates are at 7%, the highest level since 2011, signaling a looming credit card debt bubble burst.
JPMorgan Chase, Wells Fargo, Bank of America, and Citi are collectively unloading billions of dollars in bad debt, primarily driven by credit card delinquencies and soured consumer loans. In Q3 of this year, the four largest banks recorded $6.9 billion in net charge-offs, with significant percentage increases compared to the same period last year. This comes as US credit card rates hit a new all-time high in August, and total outstanding US credit card debt reached $1.36 trillion, the highest level in history.
Adam Kobeissi, founder of The Kobeissi Letter, notes a seven percentage point increase in rates over two years, reaching 23.4%, and highlights the record-breaking debt and serious delinquency rates at 7%, the highest since 2011. JPMorgan Chase, Wells Fargo, Bank of America, and Citi are unloading billions of dollars in bad debt that they’ve given up on recovering.
New earnings data shows the four largest banks in the country collectively recorded $6.9 billion in net charge-offs in Q3 of this year, primarily driven by credit card delinquencies and soured consumer loans. JPMorgan says its net charge-offs hit $2.087 billion in Q3, up nearly 40% from $1.497 billion registered in Q3 of 2023. Wells Fargo says its net charge-offs surged to $1.111 billion in Q3, an increase of nearly 54% from $722 million recorded a year ago. Citi says its net credit on losses reached $2.172 billion, an over 32% jump from the $1.637 billion witnessed in the same period last year. And BofA says net charge-offs hit $1.534 billion in the same quarter, up 64% from $931 million a year ago.
The news comes after US credit card rates hit a fresh all-time high in August. Adam Kobeissi, founder and editor-in-chief of The Kobeissi Letter, says rates have increased by seven percentage points in just two years, hitting 23.4% a couple of months ago. In addition, total outstanding US credit card debt has soared to $1.36 trillion – the highest level in history. “US consumers now have a record $1.36 trillion in credit card debt and other revolving credit meaning they pay a massive $318 billion annual interest. To put this into perspective, Americans paid just half of that in 2019 at ~$160 billion. Meanwhile, credit card serious delinquency rates are at 7%, the highest level since 2011. The credit card debt bubble is popping.”