A recent study by Hamilton Place Strategies revealed that, in 2012, commercial banks in the U.S. posted their highest profits since the 2008 financial crisis, despite a slight decrease in net income in the fourth quarter.
The report found that banks continued to increase capital levels, establishing the Tier One common capital ratio at 12.6 percent, Bloomberg reports.
“That’s measurable significant improvement,” Tim Pawlenty, the head of the Financial Services Roundtable and former governor of Minnesota, said, adding that, while banks understand the need for more capital, “we also want to make sure that the levels don’t get so high that you impede investment and economic growth,” according to Bloomberg.
Net income across U.S. commercial banks fell slightly quarter-on-quarter to $32.26 billion, though 2012 is the most profitable year since the crisis.
A large increase in deposits contributed to a decrease in commercial banks’ loan-to-deposit ratio to 70.3 percent. Total bank deposits have risen to nearly $11 trillion, an all-time high, Bloomberg reports.
Commercial banks’ increased capital also contributed to more domestic business loans, exceeding pre-crisis highs. Total loans and leases across U.S. banks reached 7.7 trillion, a record high, while total reserves fell by three percent to $151 million. Non-performing assets as a percentage of total assets fell to two percent.