Banks losing less than stress tests calculated, study says

Large U.S. banks have lost 37 percent less money on loans than the Treasury Department calculated when it stress-tested their portfolios, according to pa study by SNL Financial, an industry research service.

Actual losses by the banks through 2009, the first of two years covered by the tests, were $82 billion less than would have been expected under the government's scenario, SNL said. The Charlottesville, Virginia-based firm said the finding "comes in contrast to the belief that the exercise did not employ stringent enough expectations."

Loan losses in 2009 at San Francisco-based Wells Fargo & Co. were $21 billion less than under the test scenario, $15 billion less at JPMorgan Chase & Co. of New York, $14 billion less at Charlotte, North Carolina-based Bank of America Corp. and $8.7 billion less at New York-based Citigroup Inc., according to SNL.

Home-mortgage lending has been the category with the lowest amount of loan losses compared with the stress-test scenario, $32 billion less than calculated, SNL said yesterday.

The study didn't look at banks' results for securities trading and derivatives, which the stress tests performed in May figured would account for one-fourth of total losses of $599.2 over the two years.