Banks of the Unites States posted the most impressive boost of income since 2010. And it shows that American banking is finally recovering after a long period of slow growth.
Income of 6600 banks rose 5% since the second quarter of last year and now it’s a little more than $170 billion. A year ago net income was 8% lower and it’s hard to disagree that such a result is impressive. The biggest part of this revenue received from sales of loans and financial services.
That means that American banks are ready to get back to the good times. They have money and they are ready to lend it. There is almost 5% increase in lending since last year; many loans were given out to companies and customers. But it’s worth noticing that growth is more visible at small banks, their revenue rose for 9%. According to financial experts and analysts, today consumers tend to trust smaller banks more than to those which we call “too big to fail”.
Increase of Consumer Borrowing
This progress is a sign that American economy becomes healthier and people are ready to invest in it again. Bankers notice that financial institutions show such impressive result for the first after the end of world economic crisis. The US government says that the economy grows even faster than it was projected.
For example, gross domestic product rose for 4% and today we can watch the lowest rate of uncollectible debt almost for last 10 years. That means that consumers keep paying off their debts and wages grow across the US.
Both consumers and business start borrowing more money. And it’s a healthy sign for the economy because it shows that borrowers feel confident about their income and ability to repay loans. Will Richards, the main financial officer of one of the biggest national companies said that his company is ready to increase its line of credit. He explained that because of global economic grows his company becomes more financially secured and solvent.
A Way to Economic Growth
National businesses are expecting for significant economic boost and that’s why they actively use loans and other financial services. Demand for many goods and services rose and that caused rise of the prices. And a very important point is that interest rates on loans remain low.
Partly it’s because of the competition between banking institutions and it’s clear that every bank wants to lure more clients. That makes American lending affordable and stimulate consumers to borrow funds and to use online personal loans.
There are different forecasts concerning the future of the world economy. If general mood in the US is optimistic then in Europe economic progress is not so visible yet and it makes people doubt concerning possible economic growth in the nearest future. But most experts say that likely we will see similar positive tendency in other parts of the world soon.