Banks Earn Record Profits in Q2, Savers Sacrificed: FDIC

Jon Banking

$9 trillion in deposits go a long way.
Savers have been shanghaied into doing an enormous job, in small increments, day after day, for nine years: Recapitalizing the collapsed US banking system and making it immensely profitable again, leading to high core-capital ratios, record bonuses, big-fat dividends, and massive share-buybacks. And the FDIC, in its Quarterly Banking Profile released today, shows how.
The total number of FDIC-insured commercial banks and savings institutions fell by 271 to 5,787 by the end of the second quarter. Of them, 5,338 were community banks. Most of this shrinkage was due to consolidation. But there were a handful of bank failures: in 2016, five banks failed. So far this year, six banks failed. The remaining banks get a bigger slice of the pie.
Here’s the good news: Almost everything in the report is good news! That is, unless you’re a saver whose income stream has been confiscated in order to make this good news possible.

This post was published at Wolf Street by Wolf Richter ‘ Aug 22, 2017.