Tuesday, February 28, 2012

Banks' 2011 profit highest in five years

Commercial banks made an aggregate $26.3 billion in the fourth quarter of 2011, up 23 percent from the year before and marking the 10th straight quarter of improvement, according to data released Tuesday from the FDIC.

That pushed the banks' full-year profit to $119.5 billion -- the highest it has been since 2006.

"The industry is now in a much better position to support the economy through expanded lending," FDIC acting chairman Martin Gruenberg said in a statement. "However, levels of troubled assets and 'problem' banks are still high. And while the economy is showing signs of improvement, downside risks remain a concern."

More than 60 percent of banks reported improvement from last year, and less than 20 percent reported losses.

The results mark a slowly improving loan environment. Banks charged off less bad loans, and new delinquent loans dropped as well.

The number of "problem" institutions on the FDIC's watch list dropped to 813 from 844, and 92 banks failed compared with 157 in 2010.