While banking industry affected by the recent post-crisis and regional collapse banksprofit in the banking sector USA reached historical highs. They hit about $80 billion in the first quarter of 2023, up 33% from last year, according to a Financial Times report. Banking turmoil is largely responsible for this picture, the Financial Times notes. About half of the increase in overall industry revenues came from one-time gains from First Citizens and Flagstar, who bought the assets Bank of Silicon Valley and Signature Bank, respectively, after they were seized by regulators and sold at a discount in March. However, the jump in profits also showed that US banks as a whole benefited from the increase in interest rateslow level of non-payments on loans and the growth of the labor market.

“Most of the industry doesn’t fail,” Bert Ely, an independent banking consultant, told a British newspaper. “The economy is still in relatively good shape and that’s what matters to such profitability.”

Of the country’s nearly 4,400 banks, only 197 – or less than 5% – suffered losses.

Of the nation’s nearly 4,400 banks, only 197 — or less than 5 percent — reported losses in the first quarter, according to BankRegData, a data provider that compiles quarterly reports that banks file with the Federal Deposit Insurance Corporation. OUR JPMorgan Chasethe country’s largest bank by assets, posted the highest profit, reaching $11.7 billion in the quarter, up from $6.4 billion in the same quarter last year.

However, PacWest is among the losers, posting a loss of $1.2 billion, more than any other banking group in the first three months of 2023. The California bank said last week it had hired consultants to review the strategies she chose. In addition, Silvergate Bank, which lost $538 million in the first three months of the year second only to PacWest, announced in early March that it was closing. On the other hand, it is unlikely that banks will continue to record this growth, since interest expenses paid by all banks increased tenfold compared to last year, reaching $ 85 billion in the first quarter. This is due to the fact that banks, mainly in March , was supposed to offer savers higher interest rates.

“Overall they were in very good shape in the first quarter, but they won’t be that way until the end of the year,” said Christopher Whalen, banking analyst and head of Whalen Global Advisors. He recalls that after the collapse of the SVB, banks increased the interest rates they provided to depositors. “Costs for banks will increase. It shocks people,” he adds.