NEW YORK - August 27, 2009 - The U.S. banking industry lost a collective 3.7 billion dollars in the second quarter amid heavy write-downs and provisions for bad loans, the government's insurance agency said Thursday.
The Federal Deposit Insurance Corporation (FDIC), which insures bank and thrift deposits, said the sector swung to a loss compared with a profit of 4.8 billion dollars in the same period of 2008.
"While challenges remain, evidence is building that the U.S. economy is starting to grow again," said FDIC chairman Sheila Bair.
"Banking industry performance is - as always - a lagging indicator. The banking industry, too, can look forward to better times ahead. But, for now, the difficult and necessary process of recognizing loan losses and cleaning up balance sheets continues to be reflected in the industry's bottom line."
The FDIC's quarterly survey showed provisions for loan losses totaled 66.9 billion dollars, an increase of 16.5 billion or 32.8% over the second quarter of 2008.
The Federal Deposit Insurance Corporation (FDIC), which insures bank and thrift deposits, said the sector swung to a loss compared with a profit of 4.8 billion dollars in the same period of 2008.
"While challenges remain, evidence is building that the U.S. economy is starting to grow again," said FDIC chairman Sheila Bair.
"Banking industry performance is - as always - a lagging indicator. The banking industry, too, can look forward to better times ahead. But, for now, the difficult and necessary process of recognizing loan losses and cleaning up balance sheets continues to be reflected in the industry's bottom line."
The FDIC's quarterly survey showed provisions for loan losses totaled 66.9 billion dollars, an increase of 16.5 billion or 32.8% over the second quarter of 2008.