The US Federal Deposit Insurance Corporation (FDIC) reported on Wednesday that as companies have slowed the pace of reducing credit loss reserves,Bank of AmericaIndustry profit fell 8.3% in the second quarter to US$70.4 billion.

Although profits are still significantly higher than a year ago — up 281% from the second quarter of 2020 — banks have slowed the rate of shrinking the huge buffer established during the peak of the COVID-19 pandemic. The banking sector recorded a profit of $76.8 billion in the first quarter.

The report said that in the second quarter, banks raised their credit loss reserves by 3.7 billion US dollars, but still fell sharply by 73 billion US dollars, or 117.3%, from the same period last year. Only 14% of banks reported actually increasing their loss reserves in the last quarter.

Over the past year, the share of profitable banks rose slightly to 95.8%.

The regulator also reported that the bank's average net interest spread hit a record low of 2.5%.

Additionally, loan balances increased slightly for the first time since the second quarter of 2020 due to increased car and credit card borrowing.