Bank Profits Skyrocket; Big Banks Lead The Way

[laughingliberal]

Bank profits soared to their highest level in two years as near-zero interest rates and lower reserves for future losses allowed U.S. banks to book an $18 billion quarterly profit in the midst of a prolonged economic downturn.

Big banks led the way, accounting for $15.6 billion, or nearly 87 percent, of the industry's total first-quarter profit, according to a Thursday report by the Federal Deposit Insurance Corporation. Defined as banks with more than $10 billion in assets, they account for about 78 percent of the industry's total assets.

Boosted by the lower cost of funds they enjoy versus their smaller competitors, the big banks' margin on interest rates -- the difference they pay in interest versus what they charge -- jumped to its highest level since 2002. Banks with more than $10 billion in assets also tripled their return on assets relative to the same period a year ago. It's the highest level since the third quarter of 2007.

The industry as a whole paid $29.3 billion in interest in the three-month period ending in March, 32 percent lower than the same period last year and 65 percent lower than what banks paid two years ago. Though the industry also recorded less revenue off the interest they charge on loans and other credit products, the decline in banks' cost for funds outweighed the decline in what borrowers paid, enabling banks to record an easy profit, according to FDIC figures. <snip>

http://www.huffingtonpost.com/2010/05/20/bank-profits-skyrocket-bi_n_583288.html

This is a bit irritating