Profits Rise Despite Credit Card Losses

Profits at the nation’s commercial banks rose to a record $14.6 billion in the second quarter despite hefty losses on credit card loans, the government reported. The strong economy continued to help the banking industry, with earnings in the April-June period jumping 5.8% from $13.8 billion in the second quarter of 1996, the Federal Deposit Insurance Corp. said. FDIC Chairman Andrew Hove said the strong performance resulted in large part from a surge in lending growth, especially for commercial and industrial loans. At the same time, he noted, the record rate of losses on credit cards in the second quarter continued to parallel the high level of personal bankruptcies. Losses on credit card loans accounted for two-thirds of all loan losses reported by commercial banks during the quarter, according to the FDIC.