Banking profits down 87%
The banking sector had its worst quarterly performance in nearly twenty years as profits fell 86.5% across the sector. The weakening has forced the FDIC to begin replenishing the deposit insurance reserve this fall. The major loss in profits was tied to loan loss reserve provisions which require banks to keep additional cash on hand due to poor loan performance.
From Market Watch:
In the three months from April to June, banks posted their second worst earnings performance since 1991, the Federal Deposit Insurance Corporation said Tuesday.
Earnings for the quarter totaled just $5 billion, compared with $36.8 billion a year ago, a decline of 86.5%, the FDIC said in its second-quarter banking profile.
“The results are pretty dismal,” said FDIC Chairman Sheila Bair at a press conference.
Higher loss provisions were the main reason for the drop.
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Banking profits down 87%
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