in the fourth quarter, profits of the US banking sector fell by 45% – Kommersant

According to research organization BankRegData, which provides Financial Timesin the fourth quarter of 2023, total profit in the US banking sector fell almost 45% year over year, to $38 billion. This was the largest decline in total quarterly profit since 2020.

Researchers explain this by the fact that in the last quarter of the year, banks took a one-time write-off of costs associated with the crisis of US regional banks at the beginning of the year. Then three regional banks, Silicon Valley Bank, Signature and First Republic, were on the verge of bankruptcy and underwent emergency restructuring. The largest US banks had $16 billion in government costs for deposits. Also in the last quarter, banks set aside a total of $5 billion to cover the cost of non-performing loans and $4 billion to cover losses from securities transactions.

Costs associated with compensation for laid-off employees have also increased. At the end of 2023, the number of full-time bank employees in the United States decreased by 45 thousand. Wells Fargo bank alone, the costs of forced and unforeseen workforce reductions in the fourth quarter amounted to about $1 billion. Experts note that in addition to the above factors, the decline in bank profits in The end of the year also led to a change in the policy of the Federal Reserve, which stopped raising the base interest rate to combat inflation.

Evgeny Khvostik