U.S. banks earned more from January through March than during any quarter on record, buoyed by greater income from fees and fewer losses from bad loans.
The banking industry earned $40.3 billion in the first quarter, the Federal Deposit Insurance Corp. said Wednesday. That’s the highest ever for a single quarter and up 15.8 percent from the first quarter of 2012, when the industry’s profits were $34.8 billion.
Record profits show banks have come a long way from the 2008 financial crisis. But the report offered a reminder that the industry is still struggling to help the broader economy recover from the Great Recession.
Only about half of U.S. banks reported improved earnings from a year earlier, the lowest proportion since 2009. That shows the industry’s growth is being driven by a narrower group of the nation’s largest banks.
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.
Bank lending declined from the October-December quarter, although that followed several quarters of increases.
And bank profits from interest charged fell 2.2 percent to $104 billion. The industry’s average interest income as a percentage of total loans on its books fell from 3.35 percent to 3.27 percent. That’s the lowest portion of total loans in nearly seven years.
That has forced banks to see more revenue from fees, despite complaints from customers and consumer advocates.
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