Bank Profits Are Highest Since Early 2007
From the FDIC's Quarterly Banking Profile:
"The industry shows continuing signs of improvement," said FDIC Chairman Sheila C. Bair. She added, "though there is a limit to how far reductions in loan-loss provisions can boost industry earnings."
More than half of all institutions (56 percent) reported better quarterly net income from a year ago, and only 15 percent had a net loss for the quarter. The average return on assets (ROA), a basic yardstick of profitability, rose to 0.87 percent from 0.53 percent a year ago.
MP: Despite the strong rebound in bank profits to pre-recession levels, there was a 3.2% annual decline in bank revenues in the first quarter and an accompanying decline in loan balances, suggesting that bank credit availability is still lagging (see Washington Post story here). But the fact that bank profits have fully recovered to early 2007 levels is another sign that the worst of the financial crisis is far behind us, and the U.S. banking system is once again healthy and profitable.