Big Banks Unleash $5 Billion From Reserves on Loan Optimism (1)

Wall Street’s worst fears about the fallout from Covid-19 are receding.

Three of the biggest U.S. lenders -- JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. -- cut their combined reserves for losses on loans by more than $5 billion, helping fourth-quarter profit top estimates even as they faced headwinds from low interest rates. While posting results Friday, executives expressed guarded optimism about fiscal stimulus and rising vaccinations during a pandemic in which delinquencies have remained low. Still, the banks warned the economy isn’t out of the woods yet.

Six of the largest U.S. banks urgently...