Loan-loss provisions

Bank of Montreal in its fiscal second quarter set aside more money to cover loans that are still in good standing, highlighting concern about the fate of the North American economy.

Toronto-Dominion Bank set aside less money than expected for souring loans in the second quarter, despite concerns that U.S. tariffs would hamper economic growth.

The Buffalo, New York-based bank also said Monday that the commercial real estate lending market has started showing signs of life, but that the renewed competition is crimping its loan growth.

The Toronto-based bank set aside CA$1.5 billion in its fiscal fourth quarter to cover potentially bad loans. Executives say higher-than-normal impaired losses could persist next year.

Cleveland-based KeyCorp posts a subdued profit in the wake of a loan loss provision that was more than six times greater than the level of fourth-quarter net charge-offs.

With virus cases in its home state hitting their highest level since February, the San Antonio company declined to release reserves — a route that many banks took to boost their second-quarter profits.

The Texas company kept allowances steady, citing lingering concerns over the pandemic and commercial real estate. Yet it plans to open 25 offices in Dallas after a similar expansion in Houston drove asset and customer growth.

Banks lowered their loss provisions at the end of 2020, a sign they feel better about this year than last year, according to data from the FDIC. But loan balances fell for the second straight quarter and the annual loan growth rate was the lowest in seven years.

Some big banks trimmed their stockpiles that guard against loan losses in the fourth quarter, but overall allowances fell less than many observers predicted. The trend will likely continue given uncertainties surrounding vaccine distribution and the economy.

Just a few months after signaling that provisions for loan losses had peaked, many banks are planning to once again add to reserves to guard against pandemic-related defaults, according to a survey released by IntraFi Network.