Big banks are socking away more money to cover possible losses on consumer loans, as their executives warn the long boom in credit quality has peaked.
Lenders including J.P. Morgan Chase & Co., Wells Fargo & Co., Capital One FinancialCorp. and Discover Financial Services said on earnings calls this month that they have bolstered their reserves—in some cases for the first time in years—to prepare for an uptick in loan losses.
The higher reserves in part reflect efforts to expand loan volume. As competition for borrowers intensifies, some lenders also are lowering credit-score requirements and taking on riskier customers.