US banks’ net income rises

August 29th, 2012 - 1:07 pm ICT by IANS  

Washington, Aug 29 (IANS) US banks’ net income in the second quarter of this year continued to increase, driven by lower loan-loss provisions and higher gains on loan sales, the Federal Deposit Insurance Corporation (FDIC) reported.

The FDIC-insured commercial banks and savings institutions earned $34.5 billion in the second quarter, $5.9 billion more than in the same period of 2011. It was the 12th consecutive quarterly gain for the US banks, reported Xinhua.

Almost two-thirds of all institutions reported improvements in their quarterly profit from a year ago. Also, the share of banks reporting net losses for the quarter declined to 10.9 percent from 15.7 percent in the previous year.

The US federal bank insurer also said that the number of “problem” banks declined from 772 to 732 in the quarter, with combined assets of $282 billion. This is the lowest level since year-end 2009.

So far this year, 40 banks in the US have failed, compared to 68 at this point last year. For all of 2011, there were 92 insured institution failures, compared with 157 in 2010.

The US banks set aside $14.2 billion in provisions for loan losses in the second quarter, over 26 percent lower than a year ago. In addition, gains from loan sales increased by $3 billion. These two factors pushed their total profit higher.

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