U.S. Bank Study Sees Income Down at Profitable Year's End

U.S. commercial banks in 2012 recorded their highest annual profits since the 2008 financial crisis even as they saw a slight decline in net income for the last quarter, according to a study by Hamilton Place Strategies.

The report released today by the Washington-based consulting firm examined government and industry data. It also found that banks continued to boost capital, putting the industry’s Tier One common capital ratio at 12.6 percent.

“That’s measurable, significant improvement,” said Tim Pawlenty, the former Republican governor of Minnesota who heads the Financial Services Roundtable, in a call today with reporters. While banks understand the need for higher capital, he said, “we also want to make sure that the levels don’t get so high that you impede investment and economic growth.”

The commercial banks’ loan-to-deposit ratio fell to 70.3 percent as deposits topped an all-time high of $10 trillion, according to the report, commissioned by the Partnership for a Secure Financial Future. Domestic business loans exceeded highs before the crisis, with commercial banks holding $2.1 trillion.

To contact the reporter on this story: Jesse Hamilton in Washington at jhamilton33@bloomberg.net.

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net.

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