Amid rising revenues and decreased taxes, the Federal Deposit Insurance Corporation (FDIC) announced on Thursday (Feb. 21) that the banking industry pulled in $237 billion in 2018. The agency’s Quarterly Banking Profile also noted that net income for the industry stood at $59 billion, Bloomberg reported.
At the same time, interest income jumped by 8.1 percent during the quarter from the prior year. In addition, lease and loan balances rose 2.1 percent from the quarter before. In an announcement, FDIC Chairman Jelena McWilliams said, “Loan balances expanded, net interest margins improved and the number of ‘problem banks’ continued to decline.”
However, McWilliams added that “the recent flattening of the yield curve may present new challenges in lending and funding.”
It was reported that just 6.5 percent of banks didn’t make a profit amid the industry having $205 billion in quarterly revenue. Bloomberg also noted that large banks were “getting a break” on what they pay into the FDIC’s deposit-insurance fund as the agency reached its “statutory goal.”
The news comes after it was reported in January that not a single bank went under last year, which highlighted the strength of the banking market. The landmark occasion was the first time since 2006 that not one bank failed, and only the third time since 1933, when the FDIC was founded. Regulations put forward following the recession, economic expansion and the corporate tax changes by President Donald Trump were said to have been some of the reasons behind the milestone.
In January, it was also reported that banks were expected to have a record profit of over $100 billion. At the same time, out of small banks and those that are most vulnerable to failure, only eight went under in 2017. In the event of a bank failure, the regulator seeks to sell its assets to another institution, while the FDIC assumes responsibilities for the assets left behind.