Commercial Bank Profits Up 13.1% for 1997

Profits at the nation’s commercial banks rose 13.1% to a record $59.2 billion last year, boosted by strong growth in loans and other interest-earning activities, the government reported. The strong economy continued to boost the banking industry, with earnings in the fourth quarter jumping 11.5% to a record $15.3 billion, up 11.5% from the October-December period of 1996, the Federal Deposit Insurance Corp. said. FDIC Chairman Andrew Hove said that bank trading revenues in the fourth quarter were $1.3 billion below third-quarter levels, in what he said was “the only major influence” of the Asian financial crisis on U.S. banking’s fourth-quarter earnings. The percentage of commercial bank loans that were more than 90 days overdue fell last year to 0.96% of loans, the lowest level in the 16 years that data have been reported. Overdue credit-card loans, however, increased 2.14% in 1997 from 1.91% in 1996. Against the positive backdrop, Hove noted that regulators are concerned about looser loan standards.