With more than $37.4 billion earned in the fourth quarter alone, banks and thrifts closed out the year with the second biggest full year profit ever.
Boston MA (PRWEB) March 01, 2013
LeaseQ, one of the leading providers of business equipment leasing and financing options in the United States, is reporting near record earnings for banking institutions across the country in 2012. With more than $37.4 billion earned in the fourth quarter alone, banks and thrifts closed out the year with the second biggest full year profit ever. This is good news for the equipment leasing industry, which is projected to see similar increases in business over the first two quarters of 2013.
This paradigm shift in the banking industry especially benefits equipment leasing providers such as LeaseQ, since the abundance of extra capital will motivate more and more businesses to invest in expansion and equipment. LeaseQ is one of the leading providers of commercial equipment leasing and financing options in the country, with plans available to serve both small business startups as well as Fortune 500 corporations.
Leading economic indicators revealed that the annual net income was a 19% increase over the previous year, and fell behind the 2006 total by around $4 billion. The fourth quarter totals were 37% higher than the same quarter a year ago, and the largest profit ever for a three month span since the end of 2006. Almost 60% of institutions had better year over year quarterly earnings.
For the sixth time in seven quarters, banks boosted lending, with loans accounting for more than half of a 1.6% increase in total assets to $14.45 trillion. Net loans and leases rose to $7.5 trillion, and commercial and industrial loans increased by more than 3.7%. In what is seen as a continued pattern following the recent financial crisis, institutions also culled income from the reduction of loss provisions. The $15.1 billion set aside to cover losses in the fourth quarter was a 24.6% decrease from the provision in the fourth quarter of 2011.
There was also the warning that the earnings enhancement that had been jumpstarted from the lowering of provisions may be ending in short order. This is excellent news for the equipment leasing industry as it projects that more and more businesses will see capital available to investment and expansion.
Over the last three years, lower provisions have accounted for more than 90% of the improvement in the industry's pretax income, but that contribution has been diminishing. While further reductions in loss provisions are possible, most of the benefits to earnings from lower provisions have already been realized.