US banks profits 'boosted by improving credit losses'

21 April 2011

Improving credit losses played a significant role in helping US regional banks record strong first quarter results, it has been claimed.

Reuters reports that companies such as BB&T Corporation and PNC Financial Services Group were able to post profits that were better than expected, despite loan growth having been subdued for four years.

The news agency noted banks across Main Street and Wall Street released additional cash for earnings that had previously been set aside to cover bad loans.

In a prepared statement, chief executive of BB&T Kelly King said: "For the second consecutive quarter, we saw improvements in all measures of credit quality."

Reuters explained that several regional banks had reported unexpectedly high earnings due to lower loan loss provisions.

Goldman Sachs Group recently posted first quarter results that were greater than many analysts had predicted thanks to its bond trading efforts, while its shares increased by 1.8 per cent in premarket trading.

By Asim Shah

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