Loan-loss provisions

The Toronto-based bank set aside CA$1.5 billion in its fiscal fourth quarter to cover potentially bad loans. Executives say higher-than-normal impaired losses could persist next year.

Cleveland-based KeyCorp posts a subdued profit in the wake of a loan loss provision that was more than six times greater than the level of fourth-quarter net charge-offs.

With virus cases in its home state hitting their highest level since February, the San Antonio company declined to release reserves — a route that many banks took to boost their second-quarter profits.

The Texas company kept allowances steady, citing lingering concerns over the pandemic and commercial real estate. Yet it plans to open 25 offices in Dallas after a similar expansion in Houston drove asset and customer growth.

Banks lowered their loss provisions at the end of 2020, a sign they feel better about this year than last year, according to data from the FDIC. But loan balances fell for the second straight quarter and the annual loan growth rate was the lowest in seven years.

Some big banks trimmed their stockpiles that guard against loan losses in the fourth quarter, but overall allowances fell less than many observers predicted. The trend will likely continue given uncertainties surrounding vaccine distribution and the economy.

Just a few months after signaling that provisions for loan losses had peaked, many banks are planning to once again add to reserves to guard against pandemic-related defaults, according to a survey released by IntraFi Network.

The company's Silicon Valley Bank unit reduced its loan-loss cushion by $52 million. Private-equity and VC clients have warmed to the practice of doing deals virtually, which increases lending opportunities, SVB executives said.

The Cincinnati company, one of just a handful of lenders to reduce its cushion against bad credits in the third quarter, was grilled by analysts who suggested it was being too optimistic about the long-term effects of the pandemic recession.

Revenue at each of Goldman Sachs’s four divisions rose from a year earlier, pushing earnings per share to a record that was almost twice as high as analysts predicted.