US banks report Q1 record earnings of US$40.3b
The largest US banks are increasingly driving the industry’s profits, while many smaller institutions continue to struggle.
US banks earned more from January through March than during any quarter on record, buoyed by greater income from fees and fewer losses from bad loans.
The largest banks are increasingly driving the industry’s profits, while many smaller institutions continue to struggle.
The industry earned US$40.3 billion (HK$312.9 billion) in the first quarter, the Federal Deposit Insurance Corp. said Wednesday. That’s the highest figure ever for a single quarter. And it’s up 15.8 per cent from the first quarter of last year.
Record profits show that banks have come a long way from the 2008 financial crisis. But the report sent a reminder that the industry is still struggling to help the broader economy recover from the Great Recession.
Only about half of US banks reported improved earnings from a year earlier, the lowest proportion since 2009. That shows that the industry’s growth is being propelled by the largest financial institutions.
Banks with assets exceeding US$10 billion make up only 1.5 per cent of US banks. Yet they accounted for about 83 per cent of the industry earnings in the January-March quarter. These banks include Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. Most have recovered with help from federal bailout money and record-low borrowing rates.
