npub1zl…22n8p on Nostr: ### Deteriorating Conditions in US Banking The FDIC report, "Quarterly Banking ...
### Deteriorating Conditions in US Banking
The FDIC report, "Quarterly Banking Profile Second Quarter 2024," identifies several signs of a worsening situation in the US banking industry. Although the industry's net income increased from the previous quarter, this was largely driven by nonrecurring items like the reduction in reported expenses related to the FDIC special assessment. More concerning is the rising net charge-off rate, which climbed to 0.68%—its highest point since the second quarter of 2013. This increase was driven in part by a surge in the credit card net charge-off rate, reaching its highest level since the third quarter of 2011.
The report also highlights growing concerns in commercial real estate lending. The noncurrent rate for non-owner-occupied commercial real estate loans reached its highest point since the third quarter of 2013, largely due to the performance of office portfolios held by large banks. This deterioration in office markets contributed to a significant increase in provision expenses, which reached $23.3 billion in the second quarter of 2024. Additionally, the number of institutions on the FDIC's "Problem Bank List" increased, with their total assets also rising.
While the overall percentage of problem banks remains within a historically normal range, these trends suggest a need for heightened vigilance regarding the stability of the US banking sector.
https://www.fdic.gov/system/files/2024-09/qbp.pdf
The FDIC report, "Quarterly Banking Profile Second Quarter 2024," identifies several signs of a worsening situation in the US banking industry. Although the industry's net income increased from the previous quarter, this was largely driven by nonrecurring items like the reduction in reported expenses related to the FDIC special assessment. More concerning is the rising net charge-off rate, which climbed to 0.68%—its highest point since the second quarter of 2013. This increase was driven in part by a surge in the credit card net charge-off rate, reaching its highest level since the third quarter of 2011.
The report also highlights growing concerns in commercial real estate lending. The noncurrent rate for non-owner-occupied commercial real estate loans reached its highest point since the third quarter of 2013, largely due to the performance of office portfolios held by large banks. This deterioration in office markets contributed to a significant increase in provision expenses, which reached $23.3 billion in the second quarter of 2024. Additionally, the number of institutions on the FDIC's "Problem Bank List" increased, with their total assets also rising.
While the overall percentage of problem banks remains within a historically normal range, these trends suggest a need for heightened vigilance regarding the stability of the US banking sector.
https://www.fdic.gov/system/files/2024-09/qbp.pdf