WASHINGTON (AP) — U.S. banks earned more from July through September than in any other quarter over the past six years. The increase is further evidence that the industry is strengthening four years after the 2008 financial crisis.
The Federal Deposit Insurance Corp. said today that the banking industry earned $37.6 billion in the third quarter, up 6.6 percent from $35.3 billion in the third quarter of 2011.
About 57 percent of the banks reported improved earnings, which allowed them to set aside less for losses on loans. And the number of troubled banks fell to the lowest level in three years.
For the second straight quarter, loans to consumers increased in most categories, including home mortgages and auto loans. That suggests banks are becoming less cautious, which could help the broader economy. More lending leads to more consumer spending, which drives roughly 70 percent of economic activity.
"This was another quarter of gradual but steady recovery," FDIC Chairman Martin Gruenberg said. "Overall the news is encouraging, but continuing downside economic risks remain."