Quarterly data on commercial banks and savings institutions that are insured by the US Federal Deposit Insurance Corporation showed that profits recovered in the last quarter of 2009 but are still well below historical norms, the FDIC said yesterday.

Aggregate profits stood at $914 million in the fourth quarter, a $38.7 billion improvement from the $37.8 billion net loss the industry sustained in the fourth quarter of 2008, the institution, founded in 1933 in the midst of the Great Depression, said in a statement.

More than half of all institutions (50.3 per cent) reported year-over-year improvements in their quarterly net income. Almost one-third of all institutions (32.7 per cent) reported net losses for the quarter, compared to 34.6 per cent a year earlier.

"Consistent with a recovering economy, we saw signs of improvement in industry performance," said FDIC Chairman Sheila C. Bair. "But as we have said before, recovery in the banking industry tends to lag behind the economy, as the industry works through its problem assets."

Total loans and leases declined by $128.8 billion (1.7 percent) during the quarter. This is the sixth consecutive quarter in which the industry's loan balances declined.

As expected, the number and total assets of institutions on the FDIC's "Problem List" continued to rise. At the end of December, there were 702 insured institutions on the "Problem List," up from 552 on 30 September.