The American bank JP Morgan Chase saw profits rise sharply last quarter to a net amount of USD 14.5 billion. Industry peer Wells Fargo also presents good figures. Nevertheless, concerns about the US banking system persist, partly because of the high interest rates. ‘The real estate market in particular is a problem child,’ says Jim Tehupuring of 1Vermogensbeheer in BNR Beurs.
The high interest rates may mean that more and more customers can no longer pay off their debts, which means that the banks’ piggy banks have to be replenished considerably. Tehupuring notices that American banks are therefore taking billions of provisions. “JP Morgen has a provision of about $3 billion, compared to about $1 billion a year ago.”
Real estate sector
According to the asset manager, this means that the prospects of that bank are a lot less compared to a year ago when it comes to the creditworthiness of customers. However, there is not yet a large group of defaulters, but the real estate sector is seen as a problem child.
‘It is a challenge’
According to Tehupuring, there is a big risk there: ‘Large real estate companies have a problem. Costs are rising, but there is also more vacancy. As a result, the value of the assets decreases, which is a challenge,’ he explains. There is therefore an expectation that this could pose a major risk.
Excellent
Yet the US banking system is not in such bad shape at the moment. This is firstly evident from the fact that a number of large banks almost doubled their profits last quarter. According to the asset manager, the retail banks are doing ‘excellent’. Tehupuring therefore calls the situation a bit ambiguous, because ‘under the line, banks are doing very well’.
