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US banking profit rose 7.5% in 2015 as legal costs fell
[WASHINGTON] US banks' net income climbed 7.5 per cent in 2015 as lenders saw modest gains in revenue and lower litigation costs, the Federal Deposit Insurance Corp said Tuesday.
Industry earnings reached US$163.7 billion for last year as a few of the largest banks reported US$6.6 billion less in legal expenses, according to the regulator's Quarterly Banking Profile. Fourth-quarter earnings rose to US$40.8 billion, up 12 per cent from a year earlier, the FDIC said.
"Revenue and income were up from the previous year, overall asset quality continued to improve, loan balances increased, and there were fewer banks on the problem list," FDIC Chairman Martin Gruenberg said in a statement about the fourth-quarter. At the same time, he said, "there are signs of growing credit risk, particularly among loans related to energy and agriculture."
Large banks experienced a little good news in net interest margin during the fourth quarter, the FDIC said. With better- positioned asset portfolios, big lenders drove the first year- over-year margin growth in five years - up to 3.13 per cent as they benefited from short-term interest rates, the report said.
Lending also accelerated in the fourth quarter, up 2.3 per cent from a year earlier. Commercial and industrial lending continued to be a strong spot, the FDIC said.