U.S. bank earnings rose last quarter to their highest point since the second quarter of 2007, the Federal Deposit Insurance Corp. said on Tuesday. The industry earned $35.3 billion in the third quarter, up $11.5 billion from the same period last year, and up $6.7 billion from the second quarter.
However, the industry continues to have trouble boosting revenue. Net operating revenue was up $864 million in the third quarter — that’s less than 1%. And while the industry continues to boost profits by setting aside less to guard against losses from bad loans, the FDIC warned the increase in quarterly profits will be difficult to maintain if revenue growth continues to be slow.
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FDIC Chairman Martin Gruenberg noted that the industry continues to face challenges from the troubled housing market and uncertainty in the economy, particularly that created by the debt crisis in Europe. “Even as the banking industry recovers, the FDIC remains vigilant for new economic challenges that could lie ahead,” he said in a statement.