‘Negative Trends’ Hurting U.S. Bank Profits

Earnings at large U.S. banks showed “negative trends across the board” in the second quarter of this year, and credit quality problems in business lending may weigh on industry profits in the future, the Office of the Comptroller of the Currency said. Commercial banks’ net income dropped to $14.7 billion in the quarter, the lowest level since 1997, from a record $19.5 billion in the first quarter mainly because of slowing growth in non-interest income, losses on securities sales and increased provisions for bad loans at banks with assets above $1 billion. “If we look across the horizon, what we see is negative trends really across the board at large banks,” said Nancy Wentzler, the OCC’s deputy comptroller for global banking and financial analysis.