A sharp rise in “bad debts” threatens American banks

American banks are heading towards recording a sharp rise in “bad debts”, which constitutes a “time bomb” or a major threat at best to their profits during the coming period, and perhaps during the past few period as well. “Bad debts” are loans whose owners default for long periods, or whose owners ask the court for protection from creditors, or declare bankruptcy, which means that they are amounts owed to the bank from debtors who become impossible to repay, so the bank is forced to consider them as “bad debts.” Then he writes them off and transfers them to his list of losses. A report published by the American network “CNBC”, and viewed by “Al Arabiya.net”, said that the accumulation of “bad debts” threatens to weaken investors’ growing optimism regarding the prospects of the largest American banks. According to the report, non-performing loans (debts associated with borrowers who have not made any payment in at least the past 90 days) are expected to rise to a combined $24.4 billion in the last three months of 2023 at the four largest lenders in the United States. The four largest lenders in the United States are: JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup, according to a consensus of Bloomberg analysts.