US banks see profits climb in first quarter: FDIC

The US banking industry reported US$70.6 billion (HK$550.68 billion) in profits in the first quarter of 2025, a jump of 5.8 percent from the previous quarter, the Federal Deposit Insurance Corporation reported Wednesday.

The regulator said profit growth was primarily due to climbing noninterest income at banks, which was up 7 percent on the quarter.

"With strong capital and liquidity levels to support lending and protect against potential losses, the banking industry continued to support the country’s needs for financial services while navigating the challenges presented by economic uncertainty, elevated inflation and interest rates, tighter credit, and elevated unrealized losses," said FDIC Acting Chairman Travis Hill in a statement.

However, banks also reported slight growth in provision expenses against potential loan losses. Those expenses were up 0.3 percent quarterly to US$22.5 billion, and now stand 9.1 percent higher than a year ago.

While bank asset quality remained generally favorable, with past-due loans relatively flat, the FDIC noted that banks are still grappling with struggles in commercial real estate, where overdue loans hit 1.49 percent, its highest level since 2014.

Loan growth was also reported to be relatively slow, with balances climbing just 0.5 percent from the previous quarter. In terms of annual growth, banks are currently seeing just 3 percent growth, which is below the pre-pandemic average of 4.9 percent, the FDIC said.

Reuters