US banks hit 5-year profit high

25 May 2012

US banks hit 5-year profit high
Martin J. Gruenberg - Acting Chairman, Federal Deposit Insurance Corporation

Banks in the US recorded a collective net profit of $35.3 billion in the opening quarter of this year, new figures have revealed.

According to the Federal Deposit Insurance Corporations' (FDIC) latest report on the country's banking sector, this level of net income is financiers' best quarterly performance for almost five years.

This figure represents a 22.9 per cent - or $6.6 billion - hike on the profit of banks posted in the corresponding three-month period in 2011 and is the sector's highest net income since the onset of the global economic slump.

The FDIC attributed this trend primarily to the fact lenders are now putting less money aside in loan loss provisions while also enjoying improved income not subject to interest.

However, despite these buoyant profits, the FDIC also found that lending from financiers dipped for the first time in four quarters - a fact described as "disappointing" by Martin Gruenberg, acting chairman of the body.

By Tony Aynsley

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