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US bank earnings rose 21 percent in 2Q, lending increased

August 29, 2012
By MARCY GORDON , THE ASSOCIATED PRESS

WASHINGTON - U.S. bank earnings rose 21 percent in the April-June quarter and lending to consumers increased, adding to evidence that the industry is strengthening four years after the financial crisis.

The Federal Deposit Insurance Corp. said Tuesday that the banking industry earned $34.5 billion in the second quarter, up from $28.5 billion in the second quarter of 2011.

About 63 percent of U.S. banks reported improved earnings as they were able to set aside less for losses on loans. And the number of troubled banks fell for the fifth straight quarter.

Banks became less cautious about lending. Bank loans to consumers increased in most categories, including credit card loans and home mortgages, reversing a first-quarter decline.

"The industry continues to recover at a gradual but steady pace," FDIC Chairman Martin Gruenberg said at a news conference.

Still, the gains in revenue remain "sluggish," Gruenberg said. Total revenue increased only $1.3 billion - a slim 0.8 percent - in the second quarter from a year earlier.

Gruenberg said that the industry's bottom line was affected by JPMorgan Chase & Co.'s nearly $6 billion in trading losses revealed recently from a soured bet in its London operation. "It certainly impacted the results, and without that I think it would have been a stronger picture," he said.

 
 

 

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