https://sputnikglobe.com/20230715/big-us-banks-make-out-like-bandits-amid-interest-rate-crunch-1111899634.html
Big US Banks Make Out Like Bandits Amid Interest Rate Crunch
Big US Banks Make Out Like Bandits Amid Interest Rate Crunch
Sputnik International
The Fed’s move to precipitously hike interest rates from near zero in April 2022 to over 5 percent has wreaked havoc on smaller lenders’ bottom lines, with three US commercial banks collapsing and a big Swiss lender teetering on the brink before being absorbed by a larger Swiss bank in March. But the big players appear to be doing just fine.
2023-07-15T19:03+0000
2023-07-15T19:03+0000
2023-07-15T19:09+0000
economy
jpmorgan chase
wells fargo
citigroup
bank
banking
silicon valley bank collapse
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US banking giants JPMorgan Chase, Citigroup and Wells Fargo have made a massive profit from jacked up lending rates, netting a cool $49 billion in earnings in the second quarter of 2023.The earnings are nearly a third more than the three giant lenders made by the mid-point of 2022, and JPMorgan Chase by itself expects to close out the year with $87 billion in net interest earnings (i.e. the difference in the lender’s expenditures on interest payments on deposits, and what it makes from loans to clients).Business media indicated that the secret to the dramatic hike in earnings is accounted for by self-imposed limits on interest payments to depositors – which ultimately results in the depreciation of the real value of some $2.4 trillion in deposits as they're gradually eaten up by inflation (which hovered at 3 percent in June, down from a high of 8.2 percent in September 2022).While the big banks have taken advantage of their market-cornering weight to pocket tens of billions of dollars on the difference between the rate at which they borrow and lend, other, mostly smaller and medium-sized banks have not been so lucky, with three US commercial banks collapsing in March 2023 after their Treasury bond portfolios incurred crushing losses as market interest rates were jacked up, while they had their assets stuck in longer-maturity bonds.While the Fed’s base interest rate stands at 5-5.25 percent now, and is expected to move to 5.25-5.5 percent in its upcoming expected 11th hike since the spring of 2022, JPMorgan Chase, CitiGroup and Wells Fargo have jacked up their base lending rates to between 6 and 8.25 percent, allowing them to cash in on the difference.
https://sputnikglobe.com/20230713/a-form-of-suicide-germanys-economic-woes-created-by-its-own-sanctions-policy-1111860853.html
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jpmorgan chase, wells fargo, citigroup, banking, inflation, interest rates, federal reserve
jpmorgan chase, wells fargo, citigroup, banking, inflation, interest rates, federal reserve
Big US Banks Make Out Like Bandits Amid Interest Rate Crunch
19:03 GMT 15.07.2023 (Updated: 19:09 GMT 15.07.2023) The Fed’s move to precipitously hike interest rates from near zero in April 2022 to over 5 percent now has wreaked havoc on smaller lenders’ bottom lines, with three US commercial banks collapsing and a major Swiss lender teetering on the brink before being absorbed by a larger Swiss bank in March. But the big players appear to be doing just fine.
US banking giants JPMorgan Chase, Citigroup and Wells Fargo have made a massive profit from jacked up lending rates, netting a cool $49 billion in earnings in the second quarter of 2023.
The earnings are nearly a third more than the three giant lenders made by the mid-point of 2022, and JPMorgan Chase by itself expects to close out the year with $87 billion in net interest earnings (i.e. the difference in the lender’s expenditures on interest payments on deposits, and what it makes from loans to clients).
Business media
indicated that the secret to the dramatic hike in earnings is accounted for by self-imposed limits on interest payments to depositors – which ultimately results in the depreciation of the real value of some $2.4 trillion in deposits
as they're gradually eaten up by inflation (which hovered at 3 percent in June, down from a high of 8.2 percent in September 2022).
JPMorgan Chase CEO Jamie Dimon acknowledged that the exorbitant lending rates aren't sustainable. “We’re going to have to compete for that. You already see it in parts of our business and not in other parts,” he said.
While the big banks have taken advantage of their market-cornering weight to pocket tens of billions of dollars on the difference between the rate at which they borrow and lend, other, mostly smaller and medium-sized banks have not been so lucky, with three US commercial banks collapsing in March 2023 after their Treasury bond portfolios incurred crushing losses as market interest rates were jacked up, while they had their assets stuck in longer-maturity bonds.
While the Fed’s base interest rate stands at 5-5.25 percent now, and is expected to move to
5.25-5.5 percent in its upcoming expected 11th hike since the spring of 2022, JPMorgan Chase, CitiGroup and Wells Fargo have
jacked up their
base lending rates to between 6 and 8.25 percent, allowing them to cash in
on the difference.
