Wall Street Loan Loss Ratios Decline

All the big Wall Street banks filed their Q3 earnings reports last week, which allows Calcbench to give an update on one of our favorite performance metrics: loan loss ratios!

All banks must set aside some portion of capital to cover loans they’ve extended which might subsequently default. Those are loan loss provisions, disclosed in absolute dollars. You can then calculate a bank’s loan loss ratio by dividing the loan loss provisions into total loans outstanding. 

That ratio gives investors a sense of how confident a bank is about its loan portfolio, and really about the economy overall. A declining loan loss ratio means banks aren’t as worried about the risk of default among their loan recipients; a rising one means the banks are.

So what does that picture look like today? We pulled the results for five major banks: Bank of America ($BAC), Citigroup ($C), JPMorgan Chase ($JPM), US Bank ($USB), and Wells Fargo ($WFC). Figure 1, below, tells the tale.

As one can see, the banks’ loan loss ratios for Q3 2025 (in red) were all lower than their loan loss ratios in the year-earlier period (in blue). Some were only marginally lower, others materially lower — but across all five, lower.

For those curious about the precise amounts set aside for loan loss provisions, we present Figure 2, below.

Again, these numbers are easy to find and analyze in Calcbench. We used our Multi-Company page, where you can create peer groups of companies to study and then pull up any of scores of standard disclosures we track — including numerous bank-specific disclosures, such as loan loss provisions and total loans. 

Hardcore Calcbench subscribers can also use our API to mainline earnings data directly into your own models; or you can use our Disclosures and Footnotes Query page to drill down into a single company’s detailed disclosures. 

After all, these loan loss ratios are only one performance metric among many that banks report about the performance of their loan portfolios. Banks also report loans by category (consumer credit card loans, other consumer loans, commercial loans, real estate loans, mortgage loans, auto loans, and so forth), deposits, and a host of other metrics. 

For example, Figure 3 below, is one small snippet of the disclosures from JPMorgan’s Q3 earnings release.

It’s a lot of data that banks publish. Calcbench captures it all and has it ready for your analysis.