Synchrony, American Express Warn of Hikes in Loan Loss Reserves

Banks and credit card companies are giving investors this quarter a peek at the effects of the biggest change to bank accounting in decades—and the sightings are all over the map.

Some financial institutions are bracing to raise their loan loss reserves by as much as 65 percent under the rule change; others a fraction of that. And for many, the number will remain a mystery, at least until third quarter earnings season arrives.

How banks will handle the new current expected credit losses (CECL) accounting standard depends on the credit quality of a bank’s customers and the economic climate ...