Citigroup Inc (C)

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Here's why Citigroup's stock stands out among -2-
By: Morningstar | January 18, 2023

But even the $7.2 billion combined provision during the fourth quarter wasn't very high. During the first two quarters of 2020, the six banks' provisions totaled $44.7 billion -- they couldn't know at that time how significantly the combination of stimulus efforts by the federal government, federal reserve, along with moratoriums against foreclosures and evictions, would support credit quality.

Then in 2021, the six banks together recorded -$21 billion in loan loss provisions, for a lift in earnings.

Looking even further back to the Great Recession and its aftermath, provisions for the group (excluding Goldman Sachs and Morgan Stanley which didn't have loan exposure to require provisions to be made during those years) totaled $324 billion for three years through 2010.

It appears the big six aren't very worried about credit during this economic cycle.

To support that, here are standard loan-quality and reserve ratios for the group:

Bank                      Ticker  Net charge-offs/ average loans  Loan loss reserves/ total loans  Nonaccrual loans/ total loans  Loan loss reserves/ nonaccrual loans  
 JPMorgan Chase & Co.       JPM                             0.32%                            1.96%                          0.59%                                  294%  
 Bank of America Corp       BAC                             0.27%                            1.36%                          0.38%                                  338%  
 Wells Fargo & Co.          WFC                             0.22%                            1.43%                          0.59%                                  231%  
 Morgan Stanley              MS                               N/A                            0.63%                            N/A                                   N/A  
 Goldman Sachs Group Inc.    GS                             0.40%                            3.81%                            N/A                                   N/A  
 Citigroup Inc.              C                              0.72%                            2.90%                          1.07%                                  241%  
                                                                                                                                                        Source: FactSet 

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