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$400 bn more losses at US banks: JP Morgan
NEW YORK: JP Morgan Securities said it estimates US banks to incur $400 billion more in losses from the credit crisis and expects there will be need for more capital for certain institutions.
"We expect that total losses could reach $1.3 trillion. Banks so far have taken writedowns and losses of $920 billion, so they are roughly 70 percent through with total losses," the brokerage wrote in a note to clients.
The bulk of the bank losses will come from loan books and less from securities portfolios, which have already gone through large writedowns, the brokerage said.
In case of residential loans, total expected losses are $300 billion and banks have set aside $85 billion in reserves for these loans, the brokerage said
Given the amount of losses still to come, the system will need more government capital, the brokerage said.
NEW YORK: JP Morgan Securities said it estimates US banks to incur $400 billion more in losses from the credit crisis and expects there will be need for more capital for certain institutions.
"We expect that total losses could reach $1.3 trillion. Banks so far have taken writedowns and losses of $920 billion, so they are roughly 70 percent through with total losses," the brokerage wrote in a note to clients.
The bulk of the bank losses will come from loan books and less from securities portfolios, which have already gone through large writedowns, the brokerage said.
In case of residential loans, total expected losses are $300 billion and banks have set aside $85 billion in reserves for these loans, the brokerage said
Given the amount of losses still to come, the system will need more government capital, the brokerage said.
