US banks post record Q2 net income

A Billion Dollars

U.S. banks reported record net income of $42.2bn for the second quarter on broad gains from trading revenue, the Federal Deposit Insurance Corp. said.

Bloomberg News reports that banks’ earnings for the three months ending June 30 marked a second consecutive record quarter, the FDIC said today in its Quarterly Banking Profile.

After the second-most profitable year on record in 2012, the boom has continued in the first half of this year as some of the largest banks scored trading success that outpaced analyst expectations.

'The trends we have seen in recent quarters continued in the second quarter', FDIC Chairman Martin Gruenberg said in remarks prepared for a Washington briefing on the report.

'Asset quality continues to recover, loan balances are trending up, fewer institutions are unprofitable, the number of problem banks is down and the number of failures is significantly below levels of a year ago'.

Industry profits were widespread with just 8.2% of banks reporting negative income even as interest income decline, falling 1.7%, according to the agency’s report. Lenders set aside $8.6bn for bad loans - a 4.1% drop from the preceding quarter - and asset quality improved, with $14.2bn charge-offs.

Bank profits are being bolstered by reductions in money set aside for bad loans, mainly at the larger banks, the FDIC said in the report. Regulators at the FDIC and Office of the Comptroller of the Currency have cautioned lenders against excessive cutting of loan-loss reserves.

To access the complete Bloomberg article hit the link below

U.S. Banks Earned Record $42.2 Billion in 2nd Quarter, FDIC Says

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