Profits in the US banking sector reached an all-time high of roughly $80bn in the first quarter, up 33 per cent from a year ago, even as the industry contended with the aftermath of two bank failures and the most significant stress since the 2008 financial crisis.
The banking turmoil was in large part responsible for the bumper haul. About half of the increase in the industry’s aggregate profits came from one-time gains recorded by First Citizens and Flagstar, which bought the remnants of Silicon Valley Bank and Signature Bank, respectively, after they were seized by regulators and sold off at a discount in March.
Even so, the jump in profits also showed US banks in general benefited from rising interest rates, low loan defaults and an expanding job market despite nervousness among depositors and investors.