In 2022, the world of American banking got weird.

Four big names released their full-year results on Friday, led by JPMorgan Chase, and amid all the global macroeconomic fog, the basic story remains all too familiar: consumers are doing well even as financial markets and investment bankers are running into a nightmare. Investors can be forgiven for not being sure what to make of all this.

Job markets are strong and ordinary people still spend happily on vacations and entertainment, perhaps not at the same rate as at the end of 2021, but credit card use remains healthy and loan losses are below norms a long term.

JPMorgan, Bank of America, Citigroup and Wells Fargo put aside more money to cover a potential spike in bad debts, but perversely, it was as much about consumer confidence as it was about recession concerns. Why? Because it was fueled by the growth in credit card lending among people who buy fun things.

When COVID hit, people stopped spending money and paying off debt while stuck at home for months. Loan recovery has been slow. Total JPMorgan credit card balances finally returned to pre-pandemic levels in 2022, Bank of America and Wells Fargo are still rebuilding.

There’s an additional problem making the earnings numbers hard for investors and analysts to understand: a change in the way banks must account for credit risk that was introduced last year, meaning more losses are charged. in the beginning.

The result is that if you make more loans, you immediately need to set aside more bad debt provisions. Of course, the economy is expected to deteriorate as well, and bank executives said their outlook had worsened slightly, but they still mainly expect only a mild recession later this year.

For example, Mark Mason, Citigroup’s chief financial officer, said on a call with reporters that a soft landing for the US economy was “very manageable.”

US credit card loss rates have increased at all banks, but remain below normal pre-pandemic levels. For Citi-branded cards, losses in the latest quarter were 1.7% of total balances versus 3.75% that was normal before the pandemic, Mason said. At JPMorgan, they were 1.5% for full-year 2022, up from 3.1% in 2019. At Bank of America, they were 1.6% for 2022, up from 3.1%. And so.

These numbers will get worse, but neither bank currently expects them to pick up much more than what used to be normal. However, “currently” is the key word. As Jeremy Barnum, JPMorgan’s chief financial officer, said at the end of his presentation to investors: “I have emphasized uncertainty.”

Meanwhile, the benefit of lending more as interest rates rise is booming income: JPMorgan and Wells Fargo reported close to 50% growth in net interest income in the fourth quarter over a year ago.

The rest of the figures were very similar to those expected for the fourth quarter and the full year at all banks. Bond and currency trading blew the roof off: Bank of America posted its best fourth-quarter earnings and its best full year since 2010. Equity trading was flat or slightly down. Investment banking fees for deal advice and fundraising were a bust: nearly 60% lower in the fourth quarter compared to a year earlier at JPMorgan and Citigroup.

The least expected dark spot in some of these results, however, was investment losses for the future. Wells Fargo booked a $1 billion writedown on the value of its own portfolio of venture capital investments, primarily software companies. JPMorgan had its own accident with the $175 million deal for Frank, a student finance business bought in 2021 that it now says was a fraud. Chief Executive Officer Jamie Dimon said he would speak more about that mistake when the litigation stemming from the acquisition was finished. The bank declined to discuss how much it lost in the deal, but it has already written down part of the cost and has yet to provide full payment. You could also win your case, especially given the evidence you’ve presented in your lawsuit, as detailed by my Bloomberg Opinion colleague Matt Levine.

Goldman Sachs also released some ugly historical numbers on Friday about its own costly forays into the new digital and consumer-focused banking ahead of next week’s results.

But aside from the tech bugs and general economic fears and woes we all read about every day, the American banking story is still pretty good. JPMorgan and Bank of America posted better-than-expected earnings, and Dimon expects to restart share buybacks sooner than expected. Strange, right?

Paul J. Davies is a Bloomberg Opinion columnist covering banking and finance.

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