U.S. bank earn­ings at 6-year high

$37.6 bil­lion for third quar­ter shows banks grow­ing less cau­tious.

Austin American-Statesman - - BUSINESS - Banks

U.S. banks earned more from July through Septem­ber than in any other quar­ter over the past six years. The in­crease is fur­ther ev­i­dence that the in­dus­try is strength­en­ing four years af­ter the 2008 fi­nan­cial cri­sis.

The Fed­eral De­posit In­surance Corp. said Tues­day that the bank­ing in­dus­try earned $37.6 bil­lion in the third quar­ter, up 6.6 per­cent from $35.3 bil­lion in the third quar­ter of 2011.

About 57 per­cent of the banks re­ported im­proved earn­ings, which al­lowed them to set aside less for losses on loans. And the num­ber of trou­bled banks fell to the low­est level in three years.

For the sec­ond straight quar­ter, loans to con­sumers in­creased in most cat­e­gories, in­clud­ing home mort­gages and auto loans. That sug­gests banks are be­com­ing less cau­tious, which could help the broader econ­omy. More lend­ing leads to more con­sumer spend­ing, which drives roughly 70 per­cent of eco-

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