Core Viewpoint - Citigroup plans to allocate several hundred million dollars more than the previous quarter to address potential loan losses, indicating that major U.S. banks may be preparing for worsening economic conditions [1] Group 1: Financial Provisions - The increase in provisions is driven by credit loss costs and macroeconomic factors [1] - The bank's head of banking, Vis Raghavan, stated that the expected increase in provisions will be several hundred million dollars compared to the previous quarter [1] - The amount allocated for credit reserves may fluctuate frequently based on the company's outlook [1]

Core Viewpoint - The article discusses the tax deduction policies for loan loss provisions in financial enterprises, particularly focusing on agricultural loans and small and medium-sized enterprise (SME) loans, outlining the specific percentages for different risk categories [4][6][8]. Summary by Relevant Sections Loan Loss Provisions - Financial enterprises are allowed to deduct loan loss provisions from taxable income based on the following formula: Tax-deductible loan loss provision = Year-end eligible loan asset balance × 1% - Unused loan loss provision from the previous year [4]. Agricultural and SME Loans - Financial enterprises must classify agricultural and SME loans according to the "Loan Risk Classification Guidelines" and can deduct loan loss provisions at the following rates: - Attention category loans: 2% - Substandard category loans: 25% - Doubtful category loans: 50% - Loss category loans: 100% [4][6]. Deduction Policy for Agricultural and SME Loans - Losses from eligible agricultural and SME loans must first offset the previously deducted loan loss provisions, with any remaining losses deductible against taxable income [6]. Clarification on Deduction Applicability - According to the announcement by the Ministry of Finance and the State Administration of Taxation, the tax deduction policy for loan loss provisions for agricultural and SME loans is exclusive and does not apply to general loan loss provision deduction policies [8].

Core Insights - U.S. bank profits increased by 5.8% in Q1 2025, reaching $70.6 billion, driven by a rise in non-interest income [1] - Loan loss provisions rose by 9.1% year-over-year in the first quarter [1] - Overall asset quality remains good, although weaknesses persist in the commercial real estate (CRE) portfolio [1] - Loan growth in the banking sector slowed, with an annual growth rate of only 3% in Q1, compared to a pre-pandemic average of 4.9% [1] - The number of "problem banks" decreased by 3, now totaling 63 [1]