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FDIC says banking conditions improving

Posted: Aug. 31, 2010 | Tags: banks, BankTracker, failed banks, FDIC, Federal Deposit Insurance Corp.

The nation's banking industry made $21.7 billion in the second quarter of this year, up from a loss of $9 billion a year ago, the Federal Deposit Insurance Corp. reported Tuesday.

"The results provide more evidence that the sector is moving along the road to recovery," FDIC Chairman Shelia Bair said at a news conference.


Bair said bank profits were the highest in nearly three years. Profits grew primarily because banks, especially the nation's biggest ones, were able to reduce provisions for loan losses to its lowest in more than two years.

In fact, the amount of nonperforming loans declined for the first time in more than four years.

Even so, the number of banks on the agency's "troubled list," grew to 829, from 775 at the end of March. And the agency still expects more than 140 banks to fail this year -- 118 already have been taken over through Aug. 27. Check out our list of bank failures.

Meanwhile, lending continued its unprecedented decline, which Bair attributed more to lack of demand than lack of willingness or ability of banks to make loans.

"Lending will not pick up until businesses and consumers gain the confidence they need to hire and spend," she said.

Second-quarter figures for all banks and more analysis of the results should be available on BankTracker in a couple of weeks.

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