Tag Archives: profits

pennies

Banks report stronger profits, more lending

U.S. banks are enjoying their best profits in six years and are lending a bit more freely. The gradual improvement suggests that the industry will sustain its healing from the worst financial crisis in decades and help strengthen the economy.

The industry earned $37.6 billion from July through September — a 6.6 percent increase from its earnings in same quarter last year.

For the first time since 2009, the stronger earnings were due mainly to higher revenue rather than to less money set aside by the banks to cover losses, data issued by the Federal Deposit Insurance Corp. showed Tuesday. And loans to consumers rose nearly 1 percent from the July-September period of 2011.

“We are seeing the classic recovery from a recession,” said Bert Ely, a banking industry consultant based in Alexandria, Va. “All of the arrows are pointing in the right direction.”

Some of the largest banks are cautioning, though, that their earnings are up mostly because they’ve sold less-profitable businesses, shed bad loans and trimmed jobs — not because of a more vibrant economy.

Some banks are testing higher fees on consumer loans and services to offset new rules mandated after the crisis that have crimped revenue.

Consumer lending grew in most categories in the third quarter. That shows banks are becoming less cautious, which could help the economy. More lending leads to more consumer spending, which drives roughly 70 percent of economic activity.

The banks’ mortgage loans increased 0.8 percent from the previous quarter. Auto loans jumped 2.4 percent.

US Airways Heritage

US Airways profits may exceed expectations

UUS Airways Group Inc. said on Wednesday that its flying capacity for the year will rise 2 percent, and an investor update suggested that its third-quarter profit will be bigger than Wall Street had been expecting.

US Airways has added flying capacity as it replaces old Boeing 737s with slightly larger Airbus A321s. It also completed 99.6 percent of its scheduled flights in September, which also boosts flying capacity.

For the third quarter, which ended on Sunday, the airline’s costs came in lower than expected, including a slightly lower price for fuel.

JPMorgan analyst Jamie Baker wrote that the results suggest US Airways will report a bigger-than-expected profit for the quarter. He wrote that the guidance suggests a profit of 90 cents per share, versus a consensus by a survey of analysts for 74 cents per share.

Baker wrote that some of the costs are simply shifting into the fourth quarter. That’s likely to produce a loss or maybe a break-even quarter, he wrote.

For the quarter, US Airways traffic rose 2.7 percent. Flying capacity rose 3 percent. Because the airline added more seats than passengers, its planes weren’t quite as full. Occupancy fell 0.2 percentage points to 85.8 percent.

Per-seat passenger revenue for September was flat compared to September 2011, the airline said.

For September, traffic rose 2 percent. Capacity rose 1.1 percent. That pushed occupancy up 0.7 percentage points, to 84 percent.

Shares of US Airways Group Inc., based in Tempe, jumped 99 cents, or 9.1 percent, to $11.87 in midday trading. They’ve traded between $3.96 and $14.51 over the past year, boosted by the airline’s improving financial prospects and its ongoing efforts to merge with American Airlines.