WASHINGTON - U.S. banks' earnings declined 7.7 per cent in the January-March quarter from a year earlier, as higher interest rates dampened demand for mortgage refinancing and reduced banks' revenue from the mortgage business.
The data issued Wednesday by the Federal Deposit Insurance Corp. highlighted the impact of the increase in interest rates that occurred in the spring of 2013.
It was only the second time in the last 19 quarters that the banking industry, which has been recovering from the financial crisis, posted a decline in net income from the year-earlier quarter.
The FDIC reported that the banking industry earned $37.2 billion in the first quarter of this year, down from $40.3 billion in the same period in 2013.
The number of banks on the FDIC's problem list fell to 411 from 467.