JPMorgan Chase, Bank of America, Wells Fargo and Citigroup Holding $172,280,000,000 in Unrealized Losses As Bank Bond Portfolios Remain Underwater: S&P Global

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The four largest banks in the US are staring at tens of billions of dollars in unrealized losses on their held-to-maturity (HTM) securities as bond portfolios remain in the red.

JPMorgan Chase, Bank of America, Wells Fargo and Citigroup, according to S&P Global, together hold $172.28 billion in unrealized losses on their HTM securities as of March 31st.

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The high interest rate environment is weighing heavily on the value of the HTM securities and the downward trend in the value of the banks’ investments in these assets is unlikely to change soon, the financial data firm says.

Bank of America had the highest level of unrealized losses on HTM securities at $96.35 billion, followed by Wells Fargo at $37.82 billion. JPMorgan Chase’s unrealized losses on HTM securities stood at $22.91 billion while Citigroup’s were at $15.2 billion.

Among the Big Four lenders, Bank of America recorded the lowest decline year-over-year in the value of its HTM assets – a 6.2 decrease to $550.76 billion.

“JPMorgan Chase & Co. reported the biggest year-over-year decline in HTM securities of 20.8 to $265.17 billion while Citigroup Inc. led with the biggest quarterly decline of 9.1 to $220.51 billion as of March 31. Wells Fargo saw a 12.2 decline year-over-year in its HTM securities balances.”

The unrealized losses on HTM assets by the Big Four are emblematic of the industry, according to S&P Global.

“Banks continue to sit on unrealized losses tied to bonds they purchased when institutions were flush with excess liquidity and interest rates were far lower. Increases in interest rates punished the values of many bonds that banks held while their funding costs moved higher, putting pressure on their net interest margins.”