If you have decent credit but still have problems getting loans from your bank, here’s data that will likely add to your anger and frustration.
Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported an aggregate net income of $42.2 billion in the second quarter of 2013, the FDIC said in its newly-released quarterly report.
That’s a a $7.8 billion (22.6 percent) increase from the $34.4 billion in profits that the banks reported a year earlier.
It is also the 16th consecutive quarter that earnings have seen a year-over-year increase.
Moreover, loan balances are increasing and consumers are doing a better job of paying on time and avoiding delinquency.
“Asset quality continues to recover, loan balances are trending up, fewer institutions are unprofitable, the number of problem banks is down, and the number of failures is significantly below levels of a year ago,” FDIC Chairman Martin J. Gruenberg said.
However, revenue growth remains weak, reflecting narrow margins and modest loan growth, he said.
That slower loan growth — and higher interest rates that were triggered a few weeks ago in anticipation of the Federal Reserve’s next bond-purchasing move — likely means little has changed in terms of easier credit access.
The average net interest margin — the difference between the average yield banks earn on loans and other investments and the average cost of funding those investments — fell to 3.26 percent, its lowest level since the 3.20 percent reported in the fourth quarter of 2006.
But more credit customers are paying on time and fewer are defaulting. Loan asset quality indicators continued to improve as insured banks and thrifts charged off $14.2 billion in uncollectible loans during the quarter, down $6.3 billion (30.7 percent) from a year earlier.
Meanwhile, total loan balances rose.
Loan balances increased by $73.8 billion (1.8 percent) in the three months ending June 30, as commercial and industrial loan balances rose by $30.4 billion (2 percent).
Balances also increased in real estate loans secured by non-farm, nonresidential properties (up $11.1 billion or 1 percent), credit cards (up $10.1 billion or 1.5 percent), and auto loans (up $10 billion or 3.1 percent).
Balances declined in home equity loans (down $9.8 billion or 1.8 percent) and other loans secured by 1-4 family residential real estate (down $22.1 billion or 1.2 percent).
For the 12 months through June 30, total loan and lease balances were up by $219.4 billion (2.9 percent).