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Paul J. Davies

Banks Led by JPMorgan Have $125 Billion for You

With lenders releasing money set aside for defaults that never came, banks are earning last year’s profits and this year’s together.

Banks have buckets of cash

Banks have buckets of cash

Photographer: Bet_Noire/iStockphoto

Big banks are rolling in free cash, but investors are struggling to believe that some of them will ever hand it over. They should take another look.

Fifteen of the biggest U.S. and European banks have piled up more than $125 billion of excess capital after the first nine months of 2021. Profits soared after a spell of record corporate dealmaking, rallying financial markets and fading fears of debt defaults. But for a time, lenders were blocked from buying back shares or paying dividends.