A new report from Goldman Sachs (NYSE: GS) indicates that U.S. banks, including JP Morgan Chase & Co(NYSE: JPM), Bank of America Corp (NYSE: BAC) and Capital One Financial Corp (NYSE: COF) have already recognized an estimated two-thirds of the expected $2.1 trillion to $2.6 trillion in credit losses.
In the report, Goldman said that prime mmortgage and commercial real estate willl likely fueld the remaining credit losses that banks are expected to face. The brokerage raised its prime mortgage loss range to between 5% and 6% and raised its prediction of commercial real estate losses to between 8% and 10%.
Although the brokerage predicts a declining consumer outlook, Goldman Sachs remained positive on large banks and credit card, such as JPMorgan Chase & Co , Bank of America Corp and Capital One Financial Corp. Goldman Sach’s positivity was tempered by cautions on the stability of smaller and regional banks. The brokerage said that loan losses, trading results and pre-provision earnings were better than U.S. Treasury’s stress test during the first half of the year’s predictions.
