WASHINGTON, Feb. 26 (Xinhua) -- U.S. banks reported strong profit growth in the fourth quarter of 2013, as banks set aside fewer reserves against losses, the Federal Deposit Insurance Corp. (FDIC) said Wednesday.
FDIC-insured commercial banks and savings institutions earned 40.3 billion U.S. dollars for the last three months of 2013, 16.9 percent more than the same period in 2012. The improvement in earnings was mainly attributed to an 8.1-billion-dollar decline in loan-loss provisions, the FDIC said.
More than half of the 6,812 insured institutions had year-over- year growth in quarterly earnings, while the share of institutions reporting net losses for the quarter fell to 12.2 percent from 15 percent a year earlier, the agency said.
"The trend of slow but steady improvement that has been underway in the banking industry since 2009 continued to gain ground," said FDIC Chairman Martin J. Gruenberg in a statement.
"However, challenges remain in the industry. Narrow margins, modest loan growth, and a decline in mortgage refinancing activity have made it difficult for banks to increase revenue and profitability," he added.
The number of "problem" banks declined from 515 to 467 in the fourth quarter of 2013, with only two insured institutions failed, the FDIC said. For all of 2013, there were 24 insured institution failures, compared with 51 in 2012.
Industry earnings increased 9.6 percent to a record of 154.7 billion U.S. dollars in 2013, exceeding the previous record of 145. 2 billion U.S. dollars earned in 2006, indicating a continuation of the recovery in the banking industry after the 2008 financial crisis.
U.S. Congress created the FDIC in 1933 to restore public confidence in the country's banking system. Now the FDIC insures deposits up to 250,000 U.S. dollars per account at the country's 6, 812 banks and savings associations.