Despite the crisis, US banks made record profits in the first quarter
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In the first quarter, the profit of the US banking sector reached a historical maximum of approximately $80 billion, even despite the banking crisis. This is written by Economic Truth with reference to the Financial Times.
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Profit growth
Compared to the same period last year, profit grew by 33% even when the industry was struggling with the consequences of the bankruptcy of two banks and the greatest stress of the 2008 financial crisis.
About half of the increase in overall industry profits came from one-time gains recorded by First Citizens and Flagstar, which bought the remnants of Silicon Valley Bank (SVB) and Signature Bank, respectively, after they were seized by regulators and sold at a discount in March.
Read: The largest US banks presented reports for the first quarter
Despite this, the jump in profits also showed that American banks in general benefited from higher interest rates, low defaults on loans and the expansion of the labor market, despite the excitement among depositors and investors.
According to BankRegData, which collects quarterly reports from creditors to the Federal Deposit Insurance Corporation, only 197 of the country’s nearly 4,400 banks, or less than 5%, suffered losses in the first quarter.
JPMorgan Chase, the nation’s largest bank by assets, had the highest profit among all lenders, earning $11.7 billion from operations including lending and payment processing, compared with $6.4 billion in the same three months a year earlier. This figure does not take into account the income received by JPMorgan, which does not pass through its organization regulated by the Federal Deposit Insurance Corporation.
Read: The largest US banks lost $52 billion in capitalization in one day
PacWest Bank lost $1.2 billion — more than any other lender in the first three months of 2023. Silvergate Bank, which lost $538 million, second only to PacWest, announced its closure in early March.
Source: Ministry of Finance
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