Washington – A surge in profits of the largest U.S. banks at the end of last year has made 2011 the most profitable year for the banking industry in five years.
The Federal Deposit Insurance Corporation (FDIC) of the United States said yesterday that earnings of banks amounted to 26.3 billion USD during the quarter October-December, an increase of 23% compared to 2010. About 63% of banks reported earnings up, against 19% who were deficient.
For the year, the profit of banks amounted to 119.5 billion, its highest level since 2006.
Banks with assets of over $ 10 billion generated almost all of the growth of profits during the fourth quarter. Although they represent only 1.4% of U.S. banks, they produced 81% of profits. These banks include giants like Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. Most of them are back on their feet thanks to funding from the federal government and interest rates lower than ever.
The number of banks being on the list “confidential” troubled institutions compiled by the FDIC declined to 813 during the quarter, about 11% of all federally insured banks. There were 844 banks in trouble in the previous quarter.
Eleven U.S. banks have gone bankrupt since the beginning of the year, against 92 in 2011 and 157 in 2010. Most banks in trouble or in bankruptcy are small local or regional institutions that relied heavily on commercial loans or development.