US banks boosted first quarter earnings to $18 billion in the
first quarter of 2010, from $5.6 billion in the year-ago quarter,
making it the highest quarterly profit since the first quarter of
2008, according to the Federal Deposit Insurance Corporation
(FDIC).
The FDIC said the jump in earnings for the banks
and thrifts it insures, pointed at signs of recovery for the
industry.
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FDIC Insured institutions set aside 16.6
percent, or $10.2 billion less in provisions for loan losses in the
first quarter, although this fall was mainly concentrated among a
few of the largest banks.
Unsurprisingly, the group said that the biggest
financial institutions it insures posted the biggest earnings
growth, although overall 52 percent of its members posted net
income growth.
The FDIC said new accounting rules, enforced
in April last year, also helped bank earnings. The standards
affect how institutions measure assets and liabilities.
The average net interest margin increased to a
seven-year high of 3.8 percent from 3.4 percent in the first
quarter of 2009.
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By GlobalDataOn a less positive note, the number of ‘problem’
banks that the FDIC is concerned may fail rose to 775 institutions
from 702, with total assets at the problem banks increasing to $431
billion, from $403 billion in the comparable period a year
earlier.
Only three new charters were added during the
quarter and all three were charters formed to acquire failed banks,
the FDIC said.
