Banks Allocate $34.87 Billion for 2025 Credit Losses Amid Economic Uncertainty

JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup have collectively allocated $34.87 billion in credit loss provisions for the 2025 financial year, reflecting growing economic uncertainty. This significant allocation underscores the banks' proactive approach to mitigating potential risks associated with a volatile macroeconomic environment.

JPMorgan Chase leads the pack with the highest provisions for credit losses, setting aside $12.87 billion for the fiscal year. This figure is notably higher than the consensus estimate, indicating a cautious stance in the face of rising global macroeconomic uncertainty. In the first quarter alone, JPMorgan Chase allocated $3.31 billion for credit losses, surpassing estimates by $556 million.

Citigroup follows closely with provisions estimated at $10.69 billion for the 2025 financial year. Bank of America is expected to set aside $6.37 billion, while Wells Fargo is estimated to allocate $4.93 billion. These allocations highlight the banks' preparedness for potential credit losses, despite displaying confidence in their customers' ability to meet financial obligations.

While many banks have set aside lower-than-expected credit provisions, the overall trend points to a cautious approach. Analysts note that lenders are not providing clear insights into future economic conditions, suggesting that current revenue forecasts may not be sufficient to address impending challenges. This uncertainty underscores the need for robust credit loss provisions to safeguard against potential financial strains.