Banks Again Reap Record Annual Profits

Boosted by fee income, the nation’s 8,774 commercial banks overcame a wave of costly mergers and weakness overseas to hit a seventh straight year of record profits in 1998, rising 4.7% to $61.9 billion. the Federal Deposit Insurance Corp. reported. There was a net decline of 368 banks nationwide in 1998, as 557 banks were absorbed in mergers, three failed, 190 new ones were chartered, and two uninsured institutions became federally insured, the FDIC said. The FDIC does not separately report bank fees--which include credit card fees--but includes them in the category of non-interest income. That income jumped 18.4% in 1998 to $19.2 billion. The 1,687 FDIC-insured U.S. savings institutions had record earnings of $10.2 billion for ‘98, up 15.6% from ’97. The FDIC said the gain was largely the result of lower expenses for credit losses and growth in interest-earning assets.