US banks’ net income rises to $40.2b
Xinhua, Washington :
US banks’ net income rose 5.3 percent in the second quarter compared with the same period of last year as banks spent less money in loan-loss provisions and noninterest expenses, the Federal Deposit Insurance Corp. (FDIC) said Thursday.
The FDIC-insured commercial banks and savings institutions reported aggregate net income of 40.2 billion U.S. dollars for the second quarter of 2014, up 2 billion dollars from earnings of 38.2 billion dollars the industry reported a year earlier, the FDIC said.
The increase in earnings was mainly attributable to a fall of 1.9 billion dollars, or 22.4 percent, in loan-loss provisions and a decline of 1.5 billion dollars, or 1.4 percent, in noninterest expenses, said the FDIC.
“We saw further improvement in the banking industry during the second quarter,” FDIC Chairman Martin J. Gruenberg said in a statement.
“Net income was up, asset quality improved, loan balances grew at their fastest pace since 2007, and loan growth was broad-based across institutions and loan types. We also saw a large decline in the number of problem banks,” said Gruenberg.
More than half of the 6,656 insured institutions had year-on- year growth in quarterly earnings. The proportion of banks that were unprofitable during the second quarter fell to 6.8 percent from 8.4 percent a year earlier, said the FDIC.
“However, challenges remain. Industry revenue has been under pressure from narrow net interest margins and lower mortgage-related income. Institutions have been extending asset maturities, which is raising concerns about interest-rate risk,” said Gruenberg.
Income from mortgage-related activity remained well below the level of a year earlier. Noninterest income from the sale, securitization and servicing of mortgages was 3.7 billion dollars, 42.5 percent lower than a year ago, said the FDIC.
The FDIC was created by the U.S. Congress in 1933 to restore public confidence in the country’s banking system. Now the FDIC insures deposits at the country’s 7,019 banks and savings associations.
US banks’ net income rose 5.3 percent in the second quarter compared with the same period of last year as banks spent less money in loan-loss provisions and noninterest expenses, the Federal Deposit Insurance Corp. (FDIC) said Thursday.
The FDIC-insured commercial banks and savings institutions reported aggregate net income of 40.2 billion U.S. dollars for the second quarter of 2014, up 2 billion dollars from earnings of 38.2 billion dollars the industry reported a year earlier, the FDIC said.
The increase in earnings was mainly attributable to a fall of 1.9 billion dollars, or 22.4 percent, in loan-loss provisions and a decline of 1.5 billion dollars, or 1.4 percent, in noninterest expenses, said the FDIC.
“We saw further improvement in the banking industry during the second quarter,” FDIC Chairman Martin J. Gruenberg said in a statement.
“Net income was up, asset quality improved, loan balances grew at their fastest pace since 2007, and loan growth was broad-based across institutions and loan types. We also saw a large decline in the number of problem banks,” said Gruenberg.
More than half of the 6,656 insured institutions had year-on- year growth in quarterly earnings. The proportion of banks that were unprofitable during the second quarter fell to 6.8 percent from 8.4 percent a year earlier, said the FDIC.
“However, challenges remain. Industry revenue has been under pressure from narrow net interest margins and lower mortgage-related income. Institutions have been extending asset maturities, which is raising concerns about interest-rate risk,” said Gruenberg.
Income from mortgage-related activity remained well below the level of a year earlier. Noninterest income from the sale, securitization and servicing of mortgages was 3.7 billion dollars, 42.5 percent lower than a year ago, said the FDIC.
The FDIC was created by the U.S. Congress in 1933 to restore public confidence in the country’s banking system. Now the FDIC insures deposits at the country’s 7,019 banks and savings associations.