U.S. bank profits drop as industry slows reductions in credit loss provisions

U.S. bank profits fell 8.3% to $70.4 billion in the second quarter of 2021 as firms slowed their reductions in credit loss provisions, the Federal Deposit Insurance Corporation reported Wednesday.

The regulator also reported that average net interest margin for banks hit a new record low of 2.5%, although loan balances actually grew slightly for the first time since the second quarter of 2020 on the back of stronger borrowing for cars and credit cards.