WASHINGTON (AP) — Profits at U.S. banks jumped almost 37 percent for the October-December period, reaching the highest level for a fourth quarter in six years as banks continued to step up lending.
The figures are fresh evidence of the industry's sustained recovery more than four years after the financial crisis.
Banks earned $34.7 billion in the last three months of 2012, up from $25.4 billion a year ago and the highest for a fourth quarter since 2006, the Federal Deposit Insurance Corp. reported Tuesday. Sixty percent of banks reported improved earnings from the fourth quarter of 2011, the agency said.
The FDIC, created during the Great Depression to ensure bank deposits, monitors and examines the financial condition of U.S. banks.
For all of 2012, the agency said bank earnings rose 19 percent to $141.3 billion, the second-highest annual level ever.
The number of banks on the agency's "problem" list fell to 651 from 694. Banks had lower losses on loans in the fourth quarter and set aside almost 25 percent less to cover potential losses than in the final quarter of 2011.
"The improving trend that began more than three years ago gained further ground in the fourth quarter," FDIC Chairman Martin Gruenberg said at a news conference. Still, "troubled loans, problem banks and bank failures remain at elevated levels, while growth in lending and revenue remains sluggish," he said.
Banks with assets exceeding $10 billion drove the bulk of the earnings growth in the October-December period. While they make up just 1.5 percent of U.S. banks, they accounted for about 82 percent of the industry earnings.
Those banks include Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. Most of them have recovered with help from federal bailout money and record-low borrowing rates.