Banks: The Great Recession Is Definitely Over for Us
The old saying “laughing all the way to the bank” has a completely different meaning in the wake of the Great Recession. After numerous bailouts and an alphabet soup of financial programs, the banking industry is once again enjoying near-record profits.
Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) posted aggregate net income of $40.3 billion in the fourth quarter of 2013. That represents a 16.9 percent gain in earnings from the $34.4 billion reported a year earlier, according to the FDIC. Since the third quarter of 2009, earnings have climbed higher on a year-over-year basis in all but one quarter.
“The trend of slow but steady improvement that has been underway in the banking industry since 2009 continued to gain ground,” said FDIC Chairman Martin J. Gruenberg in a press release. “Asset quality improved, loan balances were up, and there were fewer troubled institutions. However, challenges remain in the industry. Narrow margins, modest loan growth, and a decline in mortgage refinancing activity have made it difficult for banks to increase revenue and profitability. Nonetheless, these results show a continuation of the recovery in the banking industry.”