In the United States, banks in the second quarter of this year reported losses on loans of almost $19 billion.

According to media reports, the loan loss rate, which amounts to $18.9 billion, is the largest in the last three years. Currently, financial institutions often face the problem of a lack of payments among credit card users and borrowers of commercial real estate.

According to the results of the second quarter, banks lost 61 cents for every $100 borrowed. This indicator is the highest since 2020, when the coronavirus pandemic began, which became a kind of shock factor for the economy at the global level and the level of each state.

The increase in the unprofitability of financial institutions is explained by several reasons. In this case, a negative influence factor is the continued increase of interest rates. Another aggravating circumstance in the context of a problem that is relevant and hypersensitive for the banking sector has been the deterioration of the material well-being of consumers, whose savings are being depleted and are beginning to run out in the most critical sense of this definition. Also, a negative impact factor is house owners who are unsuccessfully looking for tenants, being left without means of livelihood. In the case of this category of participants in the financial system, the crisis is caused by the scaling of the remote work format, against which the demand for commercial real estate is falling.

Gerard Cassidy, a banking analyst at RBC Capital Markets, says that loan losses signal the return of the process of social life in its economic aspect to the usual channel, beyond which society went a few years ago due to the Covid-19 pandemic. According to him, banks are used to very high quality. At the same time, this quality, which in this context is a generalizing characteristic of the situation of creditors, was provoked by extraordinary pandemic circumstances.

Currently, many banks are creating reserves in order not to be in a critical situation due to possible further losses on loans, which may increase if the unemployment rate moves to the level of 5% from the current mark of 3.5%. Gerad Cassidy said that the growth of unemployment exceeding 7% will be a difficult test for the economy.

In July, it became known that in the United States, more than half of the banks revised their lending policy toward tightening. As a result, the conditions for consumers to obtain commercial and industrial loans have become stricter. The media reports that the change in the policy of financial institutions towards tightening will continue in the foreseeable future and will manifest itself in the form of concrete decisions by the end of this year. These actions of creditors are logical and quite natural because, in a period of uncertain economic prospects, banks have no choice but to take measures that can be described as unpopular. Financial institutions also reported a deterioration in their liquidity positions.

A study on the state of small and medium-sized businesses on Main Street (SMB) has testified that currently, 40% of enterprises have concerns that, in terms of the conditional strength of fear, exceed the experiences of a year ago. Also, 15% of enterprises cannot boast of absolutely no nervousness due to a decrease in income.

Financing in the form of credit funds can be a real salvation for small and medium-sized businesses. Almost 50% of enterprises are interested in finding funds in the next 12 months. A third of representatives of small and medium-sized businesses said that they turn to national banks for access to loans.

At this time, consumers perceive credit cards as something like the basis of their financial capabilities. This is confirmed by the information that the US credit card debt has exceeded the historical mark of $1 trillion. At the same time, the Fed notes that against the background of unfavorable circumstances, including high-interest rates, post-pandemic inflationary pressure, and problems in the banking sector, there are few signs of deterioration in the financial situation of consumers.