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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.

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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.

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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.

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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.

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