Big U.S. banks are poised to report a hefty rebound in quarterly earnings this week. Large loan losses, once feared, never materialized.
JPMorgan Chase, Bank of America, Wells Fargo and Citigroup had set aside a total of $33 billion to cover loans that might go unpaid.
But thanks to extraordinary government stimulus and loan repayment holidays, that never happened.
Now with Main Street opening back up and Americans returning to some sense of normalcy, the big four could set aside as little as $1 billion for potential bad loans in the second quarter.
That's not the only good news right now for the sector.
Banks have been raking in enormous fees for takeovers, initial public offerings and the latest stock market craze: SPACS, the Special Purpose Acquisition Companies that allow start-ups to go public without the traditional IPO route.
All in all, the big four are expected to post a combined second-quarter profit of $24 billion compared with just $6 billion the same time a year ago.
But there are some potential negatives that could be more of a drag than anticipated.
Even though the bulk of consumer loans haven't gone unpaid, the lending business is far from booming with credit card usage down.
And trading revenues, which soared last year during a period of wild volatility, are likely to have fallen as well.
JPMorgan and Goldman Sachs will kick-off the earnings season before Tuesday's market open.