Banks see setback after year of record profits, FDIC says

U.S. banks had $37.2 billion in first-quarter net income as mortgage and trading revenue fell, the Federal Deposit Insurance Corp. said in its quarterly report on industry earnings. More

To continue reading this article, please do one of the following.



banking

Banks see setback after year of record profits, FDIC says

Posted 5/28/14

U.S. banks had $37.2 billion in first-quarter net income as mortgage and trading revenue fell, the Federal Deposit Insurance Corp. said in its quarterly report on industry earnings.

An earnings slump at JPMorgan Chase & Co. and losses at Bank of America Corp. contributed to the decline from a record-setting 2013 that averaged $38.6 billion per quarter. Most big banks saw declines in trading income in the three-month period that ended March 31, while revenue from originating, selling and servicing mortgages fell $4 billion from a year earlier, the FDIC said in the report released in Washington on Wednesday.

“Industry revenue has been affected by narrow margins, modest loan growth and a decline in non-interest income as higher interest rates have reduced mortgage-related activity and trading income fell,” FDIC Chairman Martin Gruenberg said in a statement. On the positive side, he said, loan balances are trending up and more firms are profitable.

The FDIC’s quarterly reports have reflected a slow recovery for banks since the 2008 credit crisis, and the industry’s record profits have relied on cuts to reserves set aside for bad loans. Lenders again bolstered their bottom lines by reducing reserves - a practice that has been criticized by regulators including Gruenberg. Reserves are at a six-year low, the FDIC said.

The number of problem institutions - those viewed by regulators as being at heightened risk of failure - continued to drop, to 411 from 467 in the preceding quarter. Five banks failed in the first quarter, according to the report.

Calendar
PBN Hosted
Events

Join PBN and two panels of successful female executives, business owners and entrepreneurs as we delve into what women should do to advance their careers, and become leaders in the corporate world and their own enterprises.
  • Book of Lists Party
    Save the date - January 15, 2015 for PBN's Book of Lists Party at the Providence ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement