tag:blogger.com,1999:blog-5972739420349387167.post4167631047580404165..comments2023-09-22T10:30:26.544-07:00Comments on BANKING ON ECONOMICS: CEO Letter to my Rain-makersROBERT MCDOWELLhttp://www.blogger.com/profile/07998963662141879105noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-5972739420349387167.post-34194306869343931112010-09-01T01:46:31.522-07:002010-09-01T01:46:31.522-07:00August 2010: The total US banking sector has recor...August 2010: The total US banking sector has recorded profits at pre-credit crunch levels, which is high profits and this time from much reduced loans! <br />There is the wide gap between large and small banks. 800 Banks (all of them small) are considered at risk of failure by FDIC.<br />The 7,830 banks supervised by FDIC reported total profits of $21.6bn for three months to June (compared to $4.4bn loss a year ago)= highest quarterly earnings since third quarter 2007. “Nearly two out of every three banks are reporting better year-over-year earnings,” said Sheila Bair, FDIC chairman. FDIC insures deposits at US banks. “As long as economic conditions remain supportive, most institutions should maintain profitability.”<br />Lower loan defaults allowed reduced loan loss provisions. <br />Big banks reduced loan loss reserves by $11.8bn in the quarter – a 4.5% fall on a year ago.<br />The FDIC list of “problem banks” – rose from 775 to 829, highest number since March 1993. <br />Higher profit (returning to 'normal'?) was on back of less not more lending, which will harden general hostility to banks. Aggregate loans and leases fell by $95.7bn, more than 1%, with big falls in construction and credit card balances, and mortgage loans down. The pace of house price slowed. Lower bank lending - fifth quarterly fall in banks’ assets in six quarters.ROBERT MCDOWELLhttps://www.blogger.com/profile/07998963662141879105noreply@blogger.com