Wednesday, February 27, 2013

It's in the bank, once more

Profits at U.S. banks jumped almost 37 percent for the October-December period, reaching the highest level for a fourth quarter in six years. Banks earned $34.7 billion in the last three months of 2012, up from $25.4 billion a year ago and the highest for a fourth quarter since 2006, the Federal Deposit Insurance Corp., created during the Great Depression to ensure bank deposits, monitors and examines the financial condition of U.S. banks, reported Tuesday. Sixty percent of banks reported improved earnings from the fourth quarter of 2011, the agency said. For all of 2012, the agency said bank earnings rose 19 percent to $141.3 billion, the second-highest annual level ever.

Banks with assets exceeding $10 billion drove the bulk of the earnings growth in the October-December period. While they make up just 1.5 percent of U.S. banks, they accounted for about 82 percent of the industry earnings. Those banks include Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. Most of them have recovered with help from federal bailout money and record-low borrowing rates.

 Goldman Sachs and Morgan Stanley are trimming their workforce. JPMorgan Chase unveiled a plan to cut 4,000 jobs this year as part of a wider effort to rid the bank of about $1bn worth of expenses.  It plans to cut 17,000 jobs by the end of 2014

The average cash bonus paid to Wall Street employees has jumped 9 per cent, thanks to rebounding financial industry profits and dramatic job cuts that spread the rewards across a smaller pool. Cash payments totalled $20bn in this year’s bonus season, which reflected work undertaken in 2012, according to numbers released by the New York state comptroller on Tuesday. The average amount of cash taken home by Wall Street employees was $121,900 – up from the $111,340 handed out last year.

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