by Pete Schroeder
WASHINGTON, May 24 (Reuters) – U.S. banks saw first-quarter 2022 profits tumble 6.5% to $59.7 billion after being forced to boost credit risk provisions amid economic uncertainties. than geopolitics, indicates Tuesday the American agency responsible for guaranteeing bank deposits.
Over one year, their results plunged by 22.2% and this trend concerns banks with more than 10 billion dollars in assets on their balance sheet.
This increase in provisions marks a halt to the growth of profits of American banks whose results had in recent quarters benefited from reversals of provisions made at the height of the coronavirus pandemic.
Faced with the uncertainties, the provisions started to rise again and increased by 19.7 billion dollars.
“Inflationary pressures, rising interest rates and geopolitical uncertainty could hurt bank profitability, weaken credit quality and reduce growth in outstanding loans,” notes the Federal Deposit Insurance Corporation.
Nevertheless, banks reported credit growth of 1% in the first quarter, thanks to loans to the commercial and industrial sectors. (Report Pete Schroeder, French version Matthieu Protard, edited by Sophie Louet)