Lenders with more exposure to unsecured loans, such as credit cards, are more susceptible to hefty write-downs, as credit card delinquencies have historically risen in step with unemployment. Citigroup recorded a $4.89 billion expense in the quarter, up from $20 million in the year-ago period, to boost reserves against anticipated losses on loans, primarily in its credit cards. Loan lossesBank of America also reported a steep drop in first-quarter profit as it prepared for billions in potential loan losses. Even with all the challenges, analysts expect Bank of America, known as a more conservative bank, to weather the downturn better than its peers due to smaller exposure to credit cards and tighter credit standards. JPMorgan Chase said on Tuesday its profit plunged by more than two-thirds mostly because of a $7 billion addition to loan-loss reserves, half of which were for credit cards.

Source: The Irish Times April 15, 2020 13:49 UTC