WASHINGTON, May 24 (Reuters) - The pace of U.S. bank lending slowed in the first three months of the year - the second consecutive quarter of such easing - but profits across the industry were higher, a leading bank regulator said on Wednesday.
The slowdown in fresh credit comes “as the economy approaches the end of the eighth year of an expansion marked by modest growth,” Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation (FDIC), told reporters.
Banks call their failed loans ‘charge-offs’ and that tally increased 13.4 percent, or $1.4 billion, compared to the year-ago numbers. It was the sixth consecutive quarter that charge-offs posted a year-over-year increase, said the FDIC.
Credit card defaults and delinquent auto loans accounted for much of the charge-offs while commercial and industrial loans saw fewer defaults than a year ago.
The FDIC insures bank deposits when a lender fails and the agency’s Quarterly Banking Profile gives a snapshot of the industry’s health.
While the tally of failed loans increased there were signs of health for the banking industry overall.
The amount of tardy loans, called ‘noncurrent’, fell for the 27th time in the last 28 quarters which left the banking sector with more resources to cover the costs of future loan losses, said the FDIC.
Across the banking industry, quarterly profits rose 12.7 percent, higher than a year earlier, said the FDIC. (Reporting By Patrick Rucker; Editing by Bernard Orr)