August 23, 2007
Rates, bad loans stunt bank growth
By Matthew L. Brown
Narrow interest margins and weak mortgage lending put commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. at $36.7 billion in net income for the second quarter, $1.3 billion behind the second quarter of 2006.
During the quarter, banks set aside $11.4 billion to cover bad loans, 75.3 percent more than was set aside a year ago.
Also, the number of real estate loans the FDIC considers "troubled" grew for the fifth consecutive quarter, by $6.4 billion, or 10.6 percent, from the second quarter of 2006.
Still, banks' second-quarter incomes were the fourth-highest quarterly earnings ever reported, the FDIC said.
The FDIC said its banks showed strong growth in non-interest income and demand for loans to commercial and industrial borrowers.
The number of deposits insured by the FDIC had its smallest increase in nearly four years during the second quarter, the FDIC said.
During the quarter, banks set aside $11.4 billion to cover bad loans, 75.3 percent more than was set aside a year ago.
Also, the number of real estate loans the FDIC considers "troubled" grew for the fifth consecutive quarter, by $6.4 billion, or 10.6 percent, from the second quarter of 2006.
Still, banks' second-quarter incomes were the fourth-highest quarterly earnings ever reported, the FDIC said.
The FDIC said its banks showed strong growth in non-interest income and demand for loans to commercial and industrial borrowers.
The number of deposits insured by the FDIC had its smallest increase in nearly four years during the second quarter, the FDIC said.
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