WASHINGTON (Reuters) - U.S. bank profits were down 40.9 percent in the fourth quarter of 2017 from one year earlier, due primarily to one-time accounting changes from the new tax law, the Federal Deposit Insurance Corp (FDIC) said on Tuesday.
Absent the changes spurred by the tax law, bank profits were estimated to drop just 2.3 percent to $42.2 billion (30.24 billion pounds) in the fourth quarter, according to the regulator. Net interest income was up 8.5 percent to $129.5 billion.
FDIC Chairman Martin Gruenberg said the industry’s performance remains positive, as the number of problem banks dropped to just 95, the lowest level since the first quarter of 2008. However, he said low interest rates and a competitive lending environment has led some banks to reach for yield, heightening risks.
Reporting by Pete Schroeder; Editing by Chizu Nomiyama