Bank Profits and Average ROA Highest Since 2006
"For all of 2011, bank net income totaled $119.5 billion, an increase of $34 billion (39.8%) from 2010 earnings. This is the highest annual net income total since the industry earned $145.2 billion in 2006. More than two out of every three banks (66.9%) reported improved earnings in 2011, and only 15.5 percent reported a net loss for the year. In 2010, 22.1 percent of all banks reported full-year net losses. The average ROA in 2011 was 0.88%, up from 0.65% in 2010. The improvement in full-year net income was made possible by an $81.1 billion reduction in loan loss provisions."
MP: Bank profits last year were almost 20% above the pre-recession 2007 level, the average ROA was the highest since 2006, and the number of bank failures in 2011 was 92, down from 157 in 2010 and 140 in 2009. Today's FDIC report provides evidence that U.S. banks are gradually recovering from the financial crisis of 2008-2009, and in 2011 had their best year since 2006.
Update 1: Over the last three months, the KBW Bank Index has gained more than 25% compared to a 15% increase in the S&P500 over that period.
Update 2: See related LA Times story "Bank earnings hit five-year high in 2011."