U.S. bank earnings rose to a record high $42.2 billion during the second quarter of 2013 as trading income jumped and banks reduced the funds they set aside in case of losses.
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Data released on Thursday by the Federal Deposit Insurance Corp (FDIC) showed bank earnings up $7.8 billion, or 23 percent, compared to the same quarter in 2012, when the industry was hit with losses on credit derivatives.
Compared to a year ago, trading income spiked during the second quarter, which ended in June. Banks cut the amount they set aside in case of losses on loans to $8.6 billion, a reduction of $5.6 billion, or 40 percent, the FDIC said.
FDIC Chairman Martin Gruenberg said loan balances were up and fewer firms lost money, but revenue growth remained weak in the industry.
"Nonetheless, overall these results show a continuation of the recovery in the banking industry," Gruenberg said in a statement.
Net operating revenue during the quarter was $170.6 billion, up $4.9 billion, or 3 percent, from a year earlier, the FDIC said.