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FOR IMMEDIATE RELEASE PR-86-2000 (12-5-2000) |
Media Contact: Phil Battey (202) 898-6993 |
Commercial bank earnings rebounded sharply in the third quarter to $19.3 billion, up 32 percent from their performance in the second quarter, the Federal Deposit Insurance Corporation (FDIC) announced Tuesday. In terms of dollars, it was commercial banks' third highest quarterly earnings performance. Average return on assets was 1.28 percent, compared to 0.99 percent in the second quarter, and a record high 1.41 percent in the third quarter of 1999. The rebound occurred, in large part, because the commercial banking industry did not experience the types of sizable restructuring and credit-related charges at large banks that depressed its results in the second quarter. Rising loan-loss provisions and higher losses on sales of securities, however, did hold down third quarter earnings. "Unlike earlier in the year, no large adverse events affected the commercial banking industry in the third quarter," FDIC Chairman Donna Tanoue said in announcing the results, "but concerns for the future remain, particularly in credit quality. These concerns darken an otherwise sunny picture." The FDIC noted:
"While earnings strength remained widespread, we are seeing signs that banks may be having difficulty sustaining high profitability," Chairman Tanoue said. "Among those signs, less than half of all commercial banks reported a higher quarterly ROA than a year ago. Net interest margins continue to decline. Growth in several types of noninterest income - which has been the strongest source of rising bank revenues - is slowing. By historical standards, profitability remains strong, but bankers - and bank regulators - cannot be complacent." ###
Attachment: Chairman’s Statement Attachment: The FDIC Preliminary Bank Earnings Report Third Quarter, 2000
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 10,101 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. FDIC press releases and other information, including today's quarterly listing, are available on the Internet at www.fdic.gov or through the FDIC's Public Information Center (800-276-6003 or (703) 562-2200). |
Last Updated 12/05/2000 | communications@fdic.gov |
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