Big banks report big loans in Q1

The first batch of earnings reports from big banks shows lending is on the rise, a sign businesses and consumers are feeling better about the economy

article-image

Dilok Klaisataporn/Shutterstock and Adobe modified by Blockworks

share

This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


US equities were relatively stable Tuesday as investors enjoyed a break from back-to-back tariff headlines and digested a batch of positive bank earnings. 

Goldman Sachs, Citibank and Bank of America reported this week. A couple data points of note: 

Banks don’t seem worried about potential loan and lease losses 

In some cases, they’re actually holding less — like Goldman Sachs, which set aside $287 million in credit loss provisions during Q1, compared to $351 million in Q4 2024. The Bank of New York Mellon also decreased its provisions from $20 million in Q4 to $18 million in Q1. 

Citigroup increased its credit loss allowance by 1% from the last quarter of 2024. Bank of America also posted a mild increase in Q1, allotting $13.26 billion for defaults vs. $13.21 billion at the end of last year. 

Why does this matter? Banks are not expecting a huge increase in loan defaults, meaning they imagine consumers will be healthy and/or they see their risk controls working. All good news. 

Of course, defaults lag economic stress, so grain of salt. What I mean is that should tariffs, market volatility, and/or generally-worse economic conditions lead to an increase in loan defaults, it might take a while before we see this materialize — both in losses and in increased loss allowances. 

Lending is up 

Big banks’ loan balances are increasing. 

Goldman Sachs reported $210 billion in loans during Q1, up from $196 billion in Q4 2024. 

Bank of America’s Q1 loans came in at $1.1 trillion, up almost 6% year over year. The bank reported quarter-over-quarter increases in both consumer and commercial lending. 

Citibank’s lending was up as well, coming in at $702 billion (a 4% increase from the first quarter of 2024). But net credit losses in Q1 were up too, showing a 7% increase year over year. 

Why does this matter? Again, it speaks to the health of consumers and businesses. When things are good, businesses want to expand and consumer spending increases given confidence they can pay back what they borrow. 

Again, grain of salt here. A rise in defaults is bad. Plus, increased commercial lending last quarter could be a reflection of businesses looking to get ahead of tariffs by increasing working capital or taking out loans to make supply chain changes. 

All in all, though, big bank earnings are off to a pretty solid start. Looking ahead at earnings season more broadly, there’s one other thing we are keeping an eye on, thanks to DataTrek Research’s Nicholas Colas. He made an excellent point on quarterly cost accruals in a note yesterday: Many companies have some leeway in how and when they report cost accruals. 

Intentionally increasing reported expenses (accruals) in a quarter where profits were especially high could be advantageous in times where the market is down and expectations for exceptional earnings are low (times like right now). These extra earnings can be “saved,” if you will, for a later quarter when investors will reward better performance. 

Colas says looking at how much companies beat on expectations will give us clues into profitability and management confidence. We’ll be watching. 


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

Swiss regulator Gespa is assessing whether FIFA’s tokenized ticket sales for the 2026 World Cup violate gambling laws

by Blockworks /
article-image

The deal gives Ondo Finance SEC-registered broker-dealer, ATS, and transfer agent licenses to operate regulated tokenized securities markets

by Blockworks /
article-image

Ethereum and Solana funds mark industry first as Grayscale adds staking to spot crypto products

by Blockworks /
article-image

US bitcoin ETFs that seen more than $2.2 billion of net inflows over the last four trading days

by Blockworks /
article-image

More than 75 million U.S. Galaxy owners gain integrated Coinbase One access through Samsung Wallet, with global rollout planned

by Blockworks /
article-image

The central bank signed agreements with firms for fraud, payments, and app services ahead of a potential launch

by Blockworks /