The summary of the Fed Report:
This report presents consolidated financial statistics for the U.S. commercial banking industry, including both bank holding companies (BHCs) and banks. Statistics are based on quarterly regulatory filings.1 Statistics are inclusive of BHCs’ nonbank subsidiaries. Separate statistics are reported on a merger-adjusted basis for the subset of BHCs with > $500bn in total assets as of 2012:Q22, and for the remainder of the industry.
- Banking industry capital, as measured by the ratio of tier 1 common equity to risk-weighted assets, increased in 2012:Q2, from 11.4% to 11.5%. This increase is consistent with a longer-run trend towards higher capitalization over the past several years, from a low industry tier 1 common ratio of 6.2% in 2008:Q4.
- Year-over-year asset growth and domestic deposit growth decreased for the banking industry relative to 2012:Q1. The year-over-year loan growth rate increased, however, with aggregate loan balances expanding on a year-over-year basis for the third consecutive quarter.
- Banking industry profitability, as measured by annualized return on assets (ROA), increased from 0.73% to 0.77% in 2012:Q2. While ROA has recovered in recent years from its low of -1.82% in 2008:Q4, it remains below average precrisis levels of greater than 1%. Return on equity (ROE) also increased this quarter, from 7.3% to 7.6%.
- The industry non-performing loan ratio decreased in 2012:Q2, continuing a secular downward trend since its high in 2009:Q4. Annualized industry loan loss provisions as a percentage of total loans also decreased slightly.
- Industry risk-weighted assets as a percent of total assets increased slightly in 2012:Q2, from 60.3% to 60.8%.
A. Composition of Industry Assets and Liabilities