Big Banks Report Increased Loan Balances in Q1
US equities remained stable as investors responded to positive earnings from major banks amid reduced tariff concerns.
Banks show confidence in loan performance
- Goldman Sachs set aside $287 million for credit losses in Q1, down from $351 million in Q4 2024.
- Bank of New York Mellon reduced its provisions from $20 million in Q4 to $18 million in Q1.
- Citigroup increased its credit loss allowance by 1% from the previous quarter.
- Bank of America slightly raised its default provision to $13.26 billion from $13.21 billion.
These trends indicate banks do not expect significant increases in loan defaults, reflecting consumer health and effective risk management.
Lending growth observed
- Goldman Sachs reported $210 billion in loans in Q1, up from $196 billion in Q4 2024.
- Bank of America’s loans totaled $1.1 trillion, a nearly 6% year-over-year increase.
- Citibank's lending reached $702 billion, marking a 4% rise from the same quarter last year.
- However, Citibank also noted a 7% increase in net credit losses year-over-year.
This increase in lending signals consumer and business confidence, although potential risks from rising defaults remain. Analysts will monitor quarterly cost accruals for insights on company profitability and management strategies during this earnings season.