Sunday, August 30th19.0°C
27271
24949

US bank earnings up 17 per cent in 4Q, loan losses fall to 7-year low; 2013 earnings at record

WASHINGTON - U.S. banks' earnings rose 17 per cent in the October-December quarter from a year earlier, as losses on loans fell to a seven-year low and banks set aside less to cover losses as well as legal costs.

The data provides fresh evidence of the banking industry's sustained recovery more than five years after the financial crisis struck. Still, the government says banks continue to have difficulty increasing revenues, and are relying on setting aside less for loan losses to boost earnings.

The Federal Deposit Insurance Corp. reported Wednesday that the banking industry earned $40.3 billion in the final quarter of 2013, up from $34.4 billion in the same period in 2012.

For all of 2013, bank earnings increased 9.6 per cent to what the agency calls a record annual level of $154.7 billion. It exceeded the previous record earnings of $145.2 billion in 2006.

The number of banks on the FDIC's "problem" list fell to 467 in the final quarter of 2013 from 515 in the third quarter.

Banks' losses on loans dropped 36.7 per cent to $11.7 billion, the lowest level for a fourth quarter since 2006, the FDIC said. The largest decline came in home mortgages, which posted a 57.7 per cent drop in losses.

FDIC Chairman Martin Gruenberg said the latest results showed "a continuation of the recovery in the banking industry." At the same time, he said, the industry still faces challenges including only modest growth in lending, narrow profit margins and a decline in mortgage refinancing business as long-term interest rates have risen.

Banks with assets exceeding $10 billion drove the bulk of the earnings growth in the October-December period. While they make up just 1.5 per cent of U.S. banks, they accounted for about 82 per cent of industry earnings.

Those banks include Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. Most of them have recovered with help from federal bailout money during the financial crisis and record-low borrowing rates.

Last year, the number of bank failures slowed to 24, still more than normal. In a strong economy, an average of four or five banks close annually. But failures were down sharply from 51 in 2012, 92 in 2011 and 157 in 2010 — the most in one year since the height of the savings and loan crisis in 1992.

In the fourth quarter, the decline in bank failures allowed the deposit insurance fund to continue to strengthen. The fund, which turned from deficit to positive in the second quarter of 2011, had a $47.2 billion balance as of Dec. 31, according to the FDIC. That compares with $40.7 billion at the end of September.

The FDIC, created during the Great Depression to ensure bank deposits, monitors and examines the financial condition of U.S. banks.

The agency guarantees bank deposits up to $250,000 per account. Apart from its deposit insurance fund, the FDIC also has tens of billions of dollars in reserves.

The Canadian Press


Read more Business News

26755


Recent Trending




Today's Market
S&P TSX13865.07+98.40
S&P CDNX555.67+10.10
DJIA16643.01-11.76
Nasdaq4828.32+15.62
S&P 5001988.87+1.21
CDN Dollar0.7552-0.0015
Gold1119.50-5.10
Oil44.51+1.95
Lumber237.20-9.70
Natural Gas2.675+0.011

 
Okanagan Companies
Pacific Safety0.165+0.005
Knighthawk0.010.00
QHR Technologies Inc1.29+0.05
Cantex0.04-0.01
Anavex Life Sciences1.34-0.05
Metalex Ventures0.055+0.000
Russel Metals21.41+0.43
Copper Mountain Mining0.64-0.01
Colorado Resources0.075-0.005
ReliaBrand Inc0.004-0.000
Sunrise Resources Ltd0.025+0.005
Mission Ready Services0.07+0.01
Decisive Dividend Corp2.75+0.14

 





FEATURED Property
2385299634 South Crest Drive
$659,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Agree to ask questions

Photo: Thinkstock.comThe STORY: I think, said Janet to herself, that I just figured out a solution to my problem of letting the prospect run the meeting.With that thought in mind, she got out of her c...


Your business is not a bank

Photo: Thinkstock.comYour plumbing business is not a bank. But when you are giving terms to customers that exceed what you get from your suppliers, you become one. And every time that someone does not...


Begin with the end in mind

Photo: ContributedWe humans love our dates: birthdays, anniversaries, 9/11, the Ides of March - our lives are intimately woven within the tapestry of the calendar. So it should come as no surprise whe...

_



26509

27060


Member of BC Press Council


26780