September 01, 2009

The stock market may be in the midst of a prolonged upward trend, but this is not yet translating into a healthy bottom line for the banking industry.According to a recent report from the FDIC, the nation's banks and savings institutions lost a combined $3.7 billion in the second quarter of this year, a year over year loss of $8.5 billion. At this time last year, banking institutions reported a $4.8 billion overall profit.

"While challenges remain, evidence is building that the U.S. economy is starting to grow again. 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," said FDIC Chair Sheila Bair.