According to the Federal Deposit Insurance Corporation (FDIC), US banks’ profits slipped 1.2% QoQ in Q3 2021 to $69.5bn as firms grappled with low interest rates and slowed the rate of shrinking their credit loss provisions, by $5.2bn compared to $10.8bn in Q2 2021. Non-current loan rates fell by 6.3% to 0.94% while the net charge-off rate for loans no longer expected to be repaid fell to 0.19%, the lowest level on record. However, when compared to the same period in 2020 when banks were preparing funds to protect themselves against the pandemic-driven loan losses, bank profits still stand ~36% higher, with two-thirds of all banks reporting annual profit growth. Almost 96% of banks were profitable.

FDIC Chairman Jelena McWilliams said “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 the pandemic,”

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