WASHINGTON (Reuters) - Profits across U.S. banks dipped by $4.5 billion to $57.4 billion in the third quarter of 2019, as “nonrecurring events” at three large financial institutions drove down sector growth, the Federal Deposit Insurance Corporation reported Tuesday.
Absent those events, which the FDIC said were previously disclosed asset writedowns by Bank of America (BAC.N), Wells Fargo (WFC.N), and Mufg Union Bank, the banking sector would have continued its march to record profits by posting a slight increase to its all-time high of $62.6 billion record in the second quarter.
The decline drove profits 7.3% lower than where they stood one year ago, but the FDIC said 62% of banks reported annual profit increases, and just 4% of banks are unprofitable.
“Overall, the banking industry reported positive results,” said FDIC Chairman Jelena McWilliams in a statement.
However, net interest income grew just 1.2 percent compared to a year ago, the slowest rate of growth since the end of 2014.
The number of problem banks dropped to 55 in the third quarter, the lowest level since the beginning of 2007. Four new banks were opened, and 46 were absorbed by mergers.
Reporting by Pete Schroeder; Editing by Chizu Nomiyama