While rival banks reported increases in loans and deposits, thanks largely to their participation in the Paycheck Protection Program, State Street and Bank of New York Mellon saw their balance sheets shrink in the second quarter.
The Birmingham, Ala., company more than doubled its loan-loss provision from three months earlier and its chief financial officer said that more than half of its loans to oil and gas companies could eventually become criticized.
Government stimulus efforts, including the Paycheck Protection Program, have fueled a deposit surge. The challenge for banks is figuring out how to put that new money to use.
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Treasury Secretary Steven Mnuchin did not define "small," but advocates have been urging Congress to convert all Paycheck Protection Program loans of less than $150,000 into grants.
Some 3,400 additional staffers in the treasury management group will be required to get pre-clearance before making trades. The policy change was driven in part by increased regulatory scrutiny, the bank said.
