US banking sector profits fall by 44 percent

The banking sector's profit in the US decreased by approximately 44 percent in the fourth quarter of 2023 compared to the previous quarter, falling to $38.4 billion. In a statement made by the US Federal Deposit Insurance Corporation (FDIC), it was reported that the net profit of 4,587 commercial banks and thrifts decreased by 2.3 percent last year. The statement noted that the sector's net profit decreased to $256.9 billion in 2023, but drew attention to the fact that the profit was well above the levels reported before the pandemic. The statement stated that the sector's profit decreased by approximately 44 percent in the fourth quarter of last year, falling to $38.4 billion, and that this decrease was due to high non-interest expenses and provision expenses, as well as low non-interest income. It was stated in the statement that domestic deposits increased by 1.1 percent in the last quarter of last year compared to the previous quarter, reaching approximately $187 billion, and that this was the first increase recorded in seven quarters. FDIC Deputy Chairman Martin Gruenberg stated in his assessment of the issue that the banking sector has shown resilience following the period of liquidity stress experienced in early 2023. Gruenberg stated that economic and geopolitical uncertainty, inflationary pressures, volatility in market interest rates, and problems in some banks' commercial real estate portfolios pose significant downside risks to the banking sector, and that the FDIC will continue to pay attention to these issues, along with financing and earnings pressures.