FDIC Chairman Martin Gruenberg in the Press Release dated November 21, 2017, stated, “This was another positive quarter for the banking industry. But while overall performance improved, the interest-rate environment and competitive lending conditions continue to pose challenges.”
Gruenberg stated that while the quarterly results were largely favorable, the industry has continued to see a gradual slowdown in the annual rate of loan growth and that the operating environment for banks remains challenging. He continued by saying that an extended period of low interest rates and an increasingly competitive lending environment have led some institutions to reach for yield.
This has led to heightened exposure to interest-rate risk, liquidity risk, and credit risk. He cautioned that these risks must be managed prudently for the industry to continue to grow on a long-run, sustainable path.
Highlights from the report are as follows:
- Higher Net Interest Income Lifts Industry Earnings
- Net Interest Margins Continue to Improve
- Banks Increase Loan-Loss Provisions
- Net Charge-Off Rate Continues to Rise at a Slow Pace
- Noncurrent Balances Fall for Mortgages and C&I Loans, Rise for Consumer Loans
- Reserve Allocations Mirror Loan Performance Trends
- Banks Increase Dividends in the Third Quarter
- Asset Growth Slows for Fourth Consecutive Quarter
- Annual Loan and Lease Growth Slows to 3.5 Percent
- Two New Charters Are Added
The full report can be accessed here:
https://www.fdic.gov/bank/analytical/qbp/2017sep/qbpall.html