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US banks posted record profits in second quarter, FDIC says
[WASHINGTON] US lenders earned a record US$43 billion in profits for the second quarter - a 7.3 per cent increase from a year ago, the Federal Deposit Insurance Corp said on Wednesday.
Higher revenue at more than two-thirds of banks and lower litigation costs pushed net income to a level that exceeded the previous mark set in 2013 by US$2.6 billion, the agency said in its report on industrywide performance.
Loan balances rose by US$185 billion during the quarter, including a US$25 billion increase in residential mortgages and US$49 billion in commercial and industrial lending. Meanwhile, trading income fell 14.1 per cent, the FDIC said.
Net charge-offs declined for a 20th consecutive quarter, falling 11 per cent from a year earlier to the lowest level since the third quarter of 2006, before the credit crisis.
FDIC Chairman Martin Gruenberg said in a statement that the agency continues to be concerned about the industry's vulnerability to interest-rate risk, noting that net interest margins are "under pressure" as maturing high-yield assets are replaced with investments with lower yields.