PHOENIX (AP) – 2016 is getting off to a lousy start for major U.S. banks. Energy loans are turning bad, low interest rates are making it hard to make profitable loans, and markets have been volatile.
On the bright side, first-quarter results from banks, which started coming out this week, haven’t been quite as bad as many analysts feared. Banks are still the worst-performing industry in the stock market so far this year, however. The financial component of the Standard & Poor’s 500 index is down 3.5 percent.
Also, several banks found out this week they have a new regulatory headache: The Federal Reserve and the Federal Deposit Insurance Corporation told five major lenders that their proposed plans for how they would be wound down in the event of another financial crisis aren’t up to snuff. They have until October to file new plans.
Here’s a look at how bank earnings are shaping up so far:
OIL TROUBLES: The billions of dollars in oil loans the big banks made during the commodities boom have become the latest set of troubled assets on their books. JPMorgan Chase, Bank of America and Wells Fargo all said they had to set aside more money to cover bad energy loans last quarter, and expect to continue to do so as long as oil prices remain low.