Commercial banks had slightly lower earnings in last year’s fourth quarter, but profits for the full year rose to a record $44.7 billion, the Federal Deposit Insurance Corp. said Wednesday. The previous record, $43.1 billion, was set in 1993.
Earnings in the quarter totaled $10.7 billion, down from $10.8 billion in 1993’s fourth quarter, the FDIC said.
The drop in quarterly profits was due to a loss of $914 million on sales of securities in bank portfolios. A year earlier, banks had a gain of $392 million in the category.
The main source of earnings improvement for the full year was higher net interest income and lower loan-loss provisions, FDIC officials said. Net interest income, derived from the spread between the cost of funds and rates on loans, rose $7.3 billion and loan-loss provisions fell $5.9 billion.
Profits last year declined about $3 billion in foreign-exchange and derivatives trading from 1993, the FDIC said.
More than 96 percent of the banks were profitable in 1994, and 11 commercial banks and two savings banks failed.
