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.
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.