U.S. bank profits drop 44% in Q4 as big firms cover failed bank costs

WASHINGTON (Reuters) – The U.S. banking sector saw its profits drop by nearly half in the last quarter of 2024, as large firms began paying hefty fees to help recoup costs incurred by several bank failures last spring, the Federal Deposit Insurance Corporation reported Thursday.

Roughly 70% of the 43.9% decline in quarterly bank profits was due to specific, non-recurring expenses at large banks, primarily a special assessment fee larger banks were ordered to pay to the FDIC to replenish its deposit insurance fund. In all of 2023, bank profits were down 2.3% to $257 billion, but remain above pre-pandemic levels, the FDIC said.

(Reporting by Pete Schroeder; Editing by Chizu Nomiyama)