The US economy was hit hard by the COVID-19 Impact. Four of the largest banks in US have shown a sign of optimism that there is a high chance of recovering the economy in the coming time.
The bank officials say that the worst COVID Impact on Economy is not yet experienced by US. But it is right behind them and can cause serious harm if the facts are neglected. The progressive strategies would eventually boost the economy rate as per expectations.
JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America have regularly reported on the decline in net interest income of the banks. The net interest income of the banks is the major source of income for the business through business & consumer loans.
The CFO of Bank of America, Paul Donofrio, said to the reporters on Wednesday that they have reached a trough point in case of net interest income. They are expecting to either see the NII rise higher in the coming quarters or move sideways for better benefit.
Citigroup also broke silence on the fact and said that this third quarter is the time for banks to stabilize. CFO if Citigroup, Mark Mason, said this on Tuesday. He was also optimistic and said that as the COVID diminishes a bit, the net interest value will grow.
These big our banks did experience slower growth due to the loan losses in the third phase of the year. The four banks did provision an amount of $5 billion in the loan loss. In addition to that, it also added $33 billion as provisions during 2020’s second quarter. It explains the actual depth of the COVID Pandemic crisis.
During this time, the banks are imposing measures to earn profitable revenue from non-profit sources. The banks have now entered the trading desks, and the one with a stronger approach is generating higher trading revenues. Not all the banks were good at the trading desk, as Wells Fargo experienced a 2% downturn in the trading revenues.
In the third quarter, JPMorgan Chase & Citigroup did show a 6% & 18% increase. With a good expectation to grow, Citigroup expects to experience a good response in the first quarter of 2021.
The banks were somehow squeezed during these past few months for customer remediation. In the coming year, these big banks and others are expecting good progress and better net interest income sources.