Banking Bubble Has Burst - FDIC Quarterly Report
February 26th, 2008 . by mcareyFrom this report it is safe to say that the high flying days of loan on anything and let the ever-increasing market cover your mistakes has come to an end. Wish I’d sold my bank stocks 18 months ago…
The fourth quarter 2007 FDIC Quarterly Banking Profile (QBP) is now available on line. FDIC-insured institutions reported net income of $105.5 billion in 2007, a decline of $39.8 billion from the record $145.2 net income that the industry earned in 2006. Higher provisions for loan losses—primarily due to weakness in residential mortgage and construction loans—and sharply lower trading revenue were primarily responsible for the drop in full-year earnings. The bulk of the earnings decline was attributable to a few large institutions, but fewer than half of all insured institutions (49.2 percent) reported increased net income in 2007. In addition, the FDIC reported that fourth-quarter earnings dropped to $5.8 billion, their lowest level since the fourth quarter of 1991.