$40,000,000,000 in Unrealized Losses Hits JPMorgan Chase As Bank of America, Wells Fargo and Citigroup Face Exposure to US Treasuries: Report

MARKET_WATCH

Economy

JPMorgan Chase has quietly revealed tens of billions of dollars in losses on securities, according to a new report on the company’s overall balance sheet. 

 

The banking giant is now stuck with roughly $40 billion in unrealized bond losses as of Q3 of this year, which is a 20% rise over the previous quarter, reports Barron’s. 

 

The new numbers were located in a footnote on the firm’s third-quarter financial supplement and were higher than an expected $34 billion loss. The news follows a new quarterly report from Bank of America revealing it now has a total of $131.6 billion in unrealized losses. 

 

Although Wells Fargo and Citigroup have also reported third-quarter earnings, they have yet to reveal the latest stats on their own unrealized losses. In Q2 of this year, Wells Fargo said it had $40 billion in unrealized bond market losses, while Citigroup had $25 billion in paper losses. 

 

The dangers of unrealized losses came into focus early this year amid the collapse of Silicon Valley Bank. The bank’s sudden failure back in March was sparked by an announcement that it had booked a $1.8 billion loss from selling a portion of its underwater bond portfolio. 

 

As a whole, Moody’s estimates that the US banking industry is facing approximately $650 billion in unrealized losses, as reported by Reuters. Those losses stem from a historic collapse in bonds amid the Fed’s push to keep interest rates higher for longer. 

 

Source : The Daily Hodl by Daily Hodl Staff / November 04, 2023

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