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The U.S. banking industry booked record profits last year, according to regulatory data released on Tuesday, as lenders grew a stronger book of loans and fewer banks failed. Continue Reading Below Net income rose 4.9 percent to $171 billion in 2016, an all-time...

U.S. Banks See Record Profits in 2016

The U.S. banking industry booked record profits last year, according to regulatory data released on Tuesday, as lenders grew a stronger book of loans and fewer banks failed. Continue Reading Below Net income rose 4.9 percent to $171 billion in 2016, an all-time...

U.S. Banks See Record Profits in 2016

The U.S. banking industry booked record profits last year, according to regulatory data released on Tuesday, as lenders grew a stronger book of loans and fewer banks failed.

Continue Reading Below

Net income rose 4.9 percent to $171 billion in 2016, an all-time high, according to Federal Deposit Insurance Corp figures, which are not inflation-adjusted.

Net income at U.S. banks increased by $3.1 billion, or 7.7 percent, in the fourth quarter of 2016 compared with a year ago, while the number of struggling lenders fell, the FDIC said in its quarterly report.

Return on equity in the fourth quarter, at 9.34 percent, was slightly higher from the prior year period. But it was the highest fourth-quarter return since 2013, when it hit 9.75 percent.

Banks saw a $432 million decline in interchange fees applied to debit card transactions in the last three months of 2016, a 4 percent decrease from the same time a year earlier.

An amendment to the Dodd-Frank Act of 2010 imposed a cap on interchange fees, which has been defended by retailers but opposed by Wall Street. Congress is due to take up the issue in legislation this year as a banking reform plan works through the U.S. House of Representatives.

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The FDIC noted the share of unprofitable banks in 2016, 4.2 percent, was the lowest since 1995.

Earlier this month, President Donald Trump said banking rules were too tough and limited the availability of credit.

But data about bank lending and the industry's health undercut those arguments, said FDIC Chairman Martin Gruenberg.

"The performance of the industry, at least over the last year, has been a pretty positive one," Gruenberg told reporters.

The FDIC insures bank deposits so customers are not wiped out if a lender fails.

Our editors found this article on this site using Google and regenerated it for our readers.

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