The country's largest banks by assets have set aside nearly $30 billion to cover losses associated with COVID-19, a tally of recently disclosed plans indicates.
The figure includes J.P. Morgan Chase's decision, announced today and reported by The Wall Street Journal, to set aside $10.47 billion for COVID-19 losses.
To put the figure into context: A year ago, J.P. Morgan's comparable provision for loan losses was $1.2 billion. The increase is $9.3 billion, or nearly eight-fold.
In a statement on the bank's website on Tuesday (July 14), Chairman and CEO Jamie Dimon said: "Despite some recent positive macroeconomic data and significant, decisive government action, we still face much uncertainty regarding the future path of the economy. However, we are prepared for all eventualities as our fortress balance sheet allows us to remain a port in the storm."
Wells Fargo & Co. previously said it was setting aside $10 billion to cover COVID-19-related losses. And Citigroup, according to the Journal, has set aside $8 billion.
The Federal Reserve warned in mid-May that banks could face huge losses due to the economic fallout.
Bank analysts told The Wall Street Journal last week that the sector has become unpredictable in part because of the leniency bankers are showing to borrowers during the pandemic.
The effect of COVID-19 on banks at the local level is surging in some areas. In one example, the Orlando Business Journal reported on Monday (July 13) that Bank of America had temporarily closed dozens of branches around the city due to surges in the virus.