Commercial banks reported $35.3 billion in aggregate profit during the third quarter of 2011, according to the Federal Deposit Insurance Corporation (FDIC), but added that lending by banks remains low.
“We continue to see income growth that reflects improving asset quality and lower loss provisions,” FDIC Acting Chairman Martin J. Gruenberg said in a statement. “U.S. banks have come a long way from the depths of the financial crisis. Bank balance sheets are stronger in a number of ways, and the industry is generally profitable, but the recovery is by no means complete.”
Nevertheless, “industry revenue remained relatively flat in the quarter Improvement in industry earnings has been almost entirely dependent on reduced loss provisions,” he explained during a briefing today. “Future revenue growth will likely depend on increased lending.” Gruenberg also noted that “the lending growth we are seeing remains well below normal levels.”
Gruenberg also observed that repayment of loans has improved “across all loan categories, with commercial and industrial loans showing the greatest improvement.”
FDIC announced that “loans to commercial and industrial borrowers increased by $44.8 billion and residential mortgage loan balances rose by $23.7 billion.”
