A cold blast from the ‘big six’ US banks opened US reporting season this week.

By Thursday morning (16 April) five of America’s biggest banks – JPMorgan, Wells Fargo, Bank of America, Citigroup and Goldman Sachs – had already reported with results from Morgan Stanley expected later on Thursday.

In general, revenues were savaged while provisions for bad debts from credit card borrowers and hard-bitten oil and consumer facing companies leapt.

Among the numbers, JPMorgan reported a 69% plunge in profits alongside an $8.3bn provision for bad loans after recently adding an additional $4.3bn in new reserves due to new accounting standards.

Quarterly profits tumbled 48.5% at Bank of America, which set aside $3.6bn for bad debts.

Elsewhere, Wells Fargo set aside $4bn and Citigroup made a 70% increase in provisions to $20.8bn. Goldman Sachs, meanwhile, posted better results but still more than doubled its bad debt provisions.

As Quilter Investors’ head of trading, Maz Alamouti, observes, “Despite some epic falls in the earnings reported so far, investors have been reassured by the huge increase in capital provisions that the banks have been quick to implement and this has helped to stem further share price losses this week.

“However,” he warns, “this is just a first glimpse of where we’re headed. The first quarter earnings numbers include January and February, which was before US government lockdown measures began in earnest.

The next quarter will show the real cost of the coronavirus as the banks contend with the damage sustained by consumer-facing businesses, US interest rates that are at close to zero and spiralling US unemployment.”