Several of America’s major banks, including JPMorgan Chase and Capital One, have seen significant setbacks in their financial performance due to rising interest rates, resulting in billions of dollars in lost loans.
US banks see massive losses
According to the Financial Times, these banks experienced a combined loss of $18.9 billion in the second quarter of this year as a result of unsuccessful loans.
These “charge-offs” indicate losses on loans that have been classified as unrecoverable, at a rate 17% higher than the preceding three months and 75% higher than in 2022.
Capital One CEO Richard Fairbank acknowledged during an earnings call last month that the US recently emerged from an “unprecedented” credit environment that favored borrowers, and that some form of repercussion was inevitable.
It is important to keep in mind that the credit performance witnessed in the last three years was exceptional. As a result, there may be some recovery on the other end, particularly for consumers who would have otherwise defaulted in that period.
Banks are currently getting ready for continued increases in loan losses and have already earmarked $21.5 billion in contingency funds for potential future losses.
Moody’s recently reduced the ratings of 10 regional banks and is contemplating downgrading several large lenders due to the likelihood of further deposit outflows and decreasing profitability.
Bitcoin new prediction is out
Bitcoin (BTC) has experienced a 3.6% decrease over the past 24 hours, but a prominent crypto trader, Michaël van de Poppe, remains optimistic. With a following of 663,200 X, he believes that the next few days are critical for BTC.
If it drops below $29,700, it may not bode well for the cryptocurrency. Van de Poppe ponders whether this is a deviation or a continuation of the trend.
Currently, BTC is valued at $25,995, which has caused a market-wide decline. In jest, Van de Poppe suggests that BTC may plummet to $12,000. However, he has several reasons to be bullish about BTC.
