WASHINGTON (2/29/12)--Commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. (FDIC) reported an aggregate profit of $26.3 billion in the fourth quarter of 2011, a $4.9 billion improvement from the $21.4 billion in net income the industry reported in the fourth quarter of 2010.
This is the 10th consecutive quarter that banks' earnings registered a year-over-year increase, but Mike Schenk, Credit Union National Association (CUNA) vice president of economics and statistics, said these record profits are not resulting in more capital for the nation's small businesses.
FDIC Acting Chairman Martin Gruenberg reported that banks reported higher positive aggregate earnings and reduced numbers of "problem" banks and failures. Loan balances increased in the final three quarters of the year, and banks of all sizes "continued to make substantial progress in improving their profitability," he added.
Total loans and leases increased by $130.1 billion, residential mortgage loan balances rose by $26 billion, and credit card balances grew by $21.3 billion, the FDIC reported. Deposits also increased by $249.7 billion during the quarter.
Beyond the top-line data, the FDIC data showed that U.S. bank small business lending continued to decline in the fourth quarter and that year-over-year bank small business loans outstanding declined by nearly 5% in 2011, Schenk said.
"It's great that the banking system is inching its way back from the abyss, but small businesses don't seem to be benefiting," he added. "In contrast credit unions have been lending to small businesses throughout the crisis and ensuing weak recovery, but many are now bumping up against the arbitrary 12.25% member business lending (MBL) cap. The FDIC data make it clear: the time is now for Congress to pass MBL cap increase legislation."
Separate pieces of House and Senate legislation would increase this cap to 27.5% of total assets, injecting $13 billion in new funds into the economy, and creating as many as 140,000 new jobs, according to CUNA estimates.
For the full FDIC release, use the resource link.
The National Credit Union Administration is expected to release fourth quarter results for the credit union system soon.