U.S. bank earnings reached their highest point since the second quarter of 2007 but the industry continues to have trouble boosting revenue with the economy struggling.
The Federal Deposit Insurance Corp said on Tuesday that the industry earned $35.3 billion (22.6 billion pounds) in the third quarter, an $11.5 billion increase from a year before.
That number is up $6.7 billion from the second quarter.
The industry continues to boost profits, however, by setting aside less to guard against losses from bad loans.
The agency again warned the increase in quarterly profits will be difficult to maintain because revenue growth continues to be slow.
Net operating revenue was up $864 million, or less than 1 percent, in the third quarter.
Acting FDIC Chairman Martin Gruenberg noted the industry continues to face challenges from the troubled housing market and uncertainty in the economy, including from the debt crisis in Europe.
Even as the banking industry recovers, the FDIC remains vigilant for new economic challenges that could lie ahead, he said in a statement.
(Reporting by Dave Clarke; Editing by Dave Zimmerman)