American banks simply had their most worthwhile quarter ever. Once more.
Tax cuts helped drive financial institution income to a report $60.2 billion within the second quarter, the FDIC says. That simply topped the $56 billion in revenue that banks hauled in in the course of the first quarter.
Financial institution income jumped 25% within the second quarter from a 12 months earlier. Greater than half of that improve got here from the tax legislation that President Donald Trump signed late final 12 months, which lowered the company charge dramatically.
It is no shock that banks are raking in cash because the economic system hums alongside.
However the choice by many banks to funnel tax financial savings into larger dividends and inventory buybacks has been controversial. Such strikes have been criticized as serving to wealthier traders however not Individuals broadly.
Financial institution executives have countered that these choices assist the economic system. JPMorgan Chase ( CEO Jamie Dimon stated in July that it was regular for firms to “recycle capital” and put it to higher use. )
In an announcement, the American Bankers Affiliation, an trade group, stated the “actual driver of earnings” final quarter was robust lending, although the group additionally credited tax reform, deregulation and the power of the economic system.
CNNMoney (New York) First printed August 23, 2018: 1:58 PM ET