(Adds Gruenberg staying as head of FDIC, link to report)
WASHINGTON Nov 29 U.S. banks' net income
increased 12.9 percent, up $5.2 billion, in the third quarter as
the number of struggling lenders fell, the Federal Deposit
Insurance Corp said on Tuesday.
Total lending increased 6.8 percent, or $591 billion, from a
year earlier, in part because of strength in new home loans and
commercial real estate, said the regulator, which shields bank
deposits if a lender fails.
The FDIC said the share of unprofitable banks, 4.6 percent,
was the lowest since the third quarter of 1997.
The FDIC's findings were included in its Quarterly Banking
Profile, which gives a snapshot of the health of the banking
The Federal Reserve has kept interest rates low since the
2008 financial crisis, but banks should expect that to change,
said FDIC Chairman Martin Gruenberg.
"Low interest rates for an extended period have led some
institutions to reach for yield," Gruenberg said in a statement.
"Banks must position themselves for rising interest rates going
Gruenberg said on Tuesday that he planned to stay through
his entire five-year term, which ends next November.
(Reporting by Patrick Rucker; Editing by Meredith Mazzilli and
Lisa VOn Ahn)