(Bloomberg) -- U.S. banks endured a record decline in income from lending in the third quarter, as the economic fallout from Covid-19 bit into profit margins.
Income from lending, or net interest income, dropped 7.2% to $129 billion compared with the year-earlier quarter, according to a Federal Deposit Insurance Corp. report released Tuesday.
Another key metric, net interest margin, fell to 2.68% -- a record low since the FDIC began issuing its Quarterly Banking Profile in 1986. That margin, the difference between the interest banks collect from lending and the interest they pay depositors, was down 68 basis points from a year earlier.
Banks still posted $51.2 billion in profit in the third quarter as lenders cut provisions for credit losses. Industry earnings jumped 173% from the three months ended June 30.
“Lower provisions reflect the improving economy and a general expectation from the banking industry of stabilization in the expected future credit performance of the loan portfolio,” FDIC Chairman Jelena McWilliams said in a statement.
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