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U.S. bank profits hit all-time high

Posted on February 26th, 2014 at 21:52 by John Sinteur in category: Robber Barons -- Write a comment

[Quote]:

Not only have the nation’s banks fully recovered from the financial crisis, their bottom lines are now healthier than ever.

On Wednesday, the Federal Deposit Insurance Corp. said profits at U.S. lenders hit an all-time high in 2013. For the year, the nation’s banks made a collective $155 billion. That’s up 10% from a year ago, and it was more than the $148 billion the banks made back in 2006, the last time profits peaked.

For the last three months of 2013, banks made $40.3 billion. That was also an all-time high, and a rebound. Bank profits were down in the second and third quarters of the year.

The FDIC noted a large portion of the bottom line boost, though, came from an accounting maneuver that other regulators have cautioned about.

  1. I’m not sure that they need to have any reserves to cover future bad loans. I mean, aren’t they highly-regulated state-supported institutions?

    That’s a bit unfair of me, though. Banks are being criticized for not lending out enough of their depositers’ money (hence the profit), but the financial crisis 6-7 years ago was partly caused by too many bad loans. So they presumably conclude that their present loans are less likely to go bad and don’t need to be offset by bad loan provisions.

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