WASHINGTON -- U.S. banks' earnings jumped 7.3 percent in the April-June period from a year earlier as revenue increased and the volume of soured loans banks had to write off fell to the lowest level since before the financial crisis.
The data issued Wednesday by the Federal Deposit Insurance Corp. showed continued improvement for the banking industry seven years after the crisis struck. The number of "problem" banks continued to fall, and some big banks had reduced expenses for legal settlements after large amounts paid out previously to resolve crisis-related cases.
The FDIC reported that U.S. banks earned $43 billion in the second quarter, up from $40.1 billion a year earlier.
Nearly 60 percent of banks reported an increase in profit from a year earlier. Only 5.6 percent of banks were unprofitable.
"The banking industry had another positive quarter as recent trends have continued," FDIC Chairman Martin Gruenberg said at a news conference. Still, he noted, low interest rates continued to crimp banks' profit margins on loans during the April-June period.
Higher interest rates could be on the horizon if the Federal Reserve raises a key rate later this month. An increase by the Fed has been widely expected, but it has been thrown in doubt in recent weeks by global turmoil in stock markets fueled by economic disruption in China.
The number of banks on the FDIC's confidential "problem list" fell to 228 from 253 in the first quarter.
Business on 09/03/2015