Revolving consumer credit was up 8.3% (annualized) in October, or $6.4 billion. However, non-revolving credit was down 1.2%, or $1.6 billion.
Total consumer credit was up $4.7 billion from September, an annualized increase of 2.3%.
Rising levels of troubled loans in all major loan categories, but most notably in residential mortgage portfolios, led to a steep jump in expenses for bad loans in the third quarter. These higher costs, combined with sharply lower trading revenue, caused industry earnings to fall 24.7 percent from a year ago to $28.7 billion — the lowest level for industry earnings since the fourth quarter of 2002. This is the first time since 2003 that quarterly earnings have been below $30 billion. The industry’s return on assets (ROA) for the quarter was 0.92 percent, the lowest ROA since the fourth quarter of 1992. Slightly fewer than half of all insured institutions (48.5 percent) had ROAs of 1 percent or higher. A year ago, 54.4 percent of institutions attained this benchmark. The year-over-year decline in industry net income was fairly widespread; almost half of all institutions (49 percent) reported lower quarterly earnings compared to the third quarter of 2006.
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