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Profits and balance sheet developments at U.S. commercial banks in 1997

Author

Listed:
  • William B. English
  • William R. Nelson

Abstract

U.S. commercial banks had another excellent year in 1997. Their return on equity remained in the elevated range that it has occupied for five consecutive years, and their return on assets reached a new high. Banks maintained their profitability while also adding significantly to assets. The year's strong economic growth increased the demand for credit; banks more than met that demand, gaining market share. In addition, banks departed from the pattern of recent years by sharply increasing their holdings of securities. Compared with 1996, banks earned a somewhat lower average rate on their interest-earning assets and paid a bit more on their liabilities, but these developments were more than offset by higher fee income and increased efficiency. Loan losses remained low relative to loans.

Suggested Citation

  • William B. English & William R. Nelson, 1998. "Profits and balance sheet developments at U.S. commercial banks in 1997," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 84(Jun), pages 391-419, June.
    • Handle: RePEc:fip:fedgrb:y:1998:i:jun:p:391-419:n:v.84no.6
    DOI: 10.17016/bulletin.1998.84-6
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    File URL: http://www.federalreserve.gov/pubs/bulletin/1998/199806lead.pdf
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    Citations

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    Cited by:

    1. Jonathan Batten & Peter Szilagyi, 2011. "The Recent Internationalization of Japanese Banks," Japanese Economy, Taylor & Francis Journals, vol. 38(1), pages 81-120.
    2. Bassett, William F. & Chosak, Mary Beth & Driscoll, John C. & Zakrajšek, Egon, 2014. "Changes in bank lending standards and the macroeconomy," Journal of Monetary Economics, Elsevier, vol. 62(C), pages 23-40.
    3. Marsh, W. Blake, 2023. "Supervisory stringency, payout restrictions, and bank equity prices," Journal of Banking & Finance, Elsevier, vol. 154(C).
    4. English, William B. & Van den Heuvel, Skander J. & Zakrajšek, Egon, 2018. "Interest rate risk and bank equity valuations," Journal of Monetary Economics, Elsevier, vol. 98(C), pages 80-97.
    5. William B English, 2002. "Interest rate risk and bank net interest margins," BIS Quarterly Review, Bank for International Settlements, December.
    6. Covas, Francisco B. & Rump, Ben & Zakrajšek, Egon, 2014. "Stress-testing US bank holding companies: A dynamic panel quantile regression approach," International Journal of Forecasting, Elsevier, vol. 30(3), pages 691-713.
    7. Francisco Scott, 2023. "How Mergers in the Farm Credit System Have Affected Ag Banks," Economic Review, Federal Reserve Bank of Kansas City, vol. 0(no. 3), pages 1-23, July.
    8. Stephen Jones & Forest Myers & Jim Wilkinson, 2022. "Considering Bank Age and Performance for De Novo Status," Economic Review, Federal Reserve Bank of Kansas City, vol. 107(no.2), June.
    9. J. Christina Wang, 2003. "Service output of bank holding companies in the 1990s and the role of risk," Working Papers 03-6, Federal Reserve Bank of Boston.
    10. Calem, Paul & Rob, Rafael, 1999. "The Impact of Capital-Based Regulation on Bank Risk-Taking," Journal of Financial Intermediation, Elsevier, vol. 8(4), pages 317-352, October.
    11. Bassett, William F. & Marsh, W. Blake, 2017. "Assessing targeted macroprudential financial regulation: The case of the 2006 commercial real estate guidance for banks," Journal of Financial Stability, Elsevier, vol. 30(C), pages 209-228.

    More about this item

    Keywords

    Banks and banking - Accounting; Bank assets;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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