Page 24 - ARUBA TODAY 1 MAART, 2017

Wednesday 1 March 2017 BUSINESS
A24

US banks in strong shape as 4th quarter profit jumps

MARCY GORDON loans showed the biggest
AP Business Writer growth, 5 percent, while
WASHINGTON (AP) — U.S. lending for real estate con-
banks’ earnings in the final struction rose 3.3 percent.
quarter of 2016 rose 7.7 per- Banks’ net interest income
cent from a year earlier, as on loans increased by $8.4
lending continued to grow billion, or 7.6 percent.
and banks set aside less for At the same time, the vol-
losses on loans for the first ume of credit card loans
time since late 2015. that were written off in the
The data issued Tuesday fourth quarter rose by $1.4
by the Federal Deposit billion, or 24.8 percent.
Insurance Corp. showed Commercial and industrial
strength in the industry loans written off jumped
more than eight years after by $666 million, or 37.9 per-
the financial crisis struck. cent.
However, banks continued After the election of Presi-
to post bigger losses on dent Donald Trump in No-
loans, especially for credit vember, long-term interest
cards and commercial rates climbed, propelled
and industrial loans. largely by investors’ belief
The FDIC reported that U.S. that his plan to cut taxes
banks earned $43.7 billion and spend massively on
in the fourth quarter, up This photo shows a Bank of America sign in Philadelphia. U.S. banks’ earnings in the final quarter of roads, bridges, airports and
from $40.8 billion a year 2016 rose 7.7 percent from a year earlier, as lending continued to grow and banks set aside less other infrastructure could
earlier. for losses on loans for the first time since late 2015. (AP Photo/Matt Rourke) ignite inflation. When they
Almost 60 percent of banks foresee rising inflation,
reported an increase in fourth quarter of 2015. their profits by making a close eye on the situa- bond investors demand
profit from a year earlier. FDIC Chairman Martin Gru- more risky loans with higher tion, he said.As a sign of a higher long-term rates and
Only 8.1 percent of banks enberg said some banks rates and extending the healthy banking industry, pay lower prices for bonds.
were unprofitable, down have been getting around terms of loans. FDIC exam- overall lending increased Banks could earn more in-
from 9.6 percent in the low interest rates that crimp iners will continue to keep by 0.8 percent. Credit card terest on loans. q
Target pledges to reinvest in business after weak quarter

MICHELLE CHAPMAN cludes the holiday season shoppers away. Under Cor-
ANNE D’INNOCENZIO fell 43 percent, with strong nell, Target had been cut-
JOSEPH PISANI online sales failing to offset ting costs, testing smaller
NEW YORK (AP) — Target, weakening business at its formats, and expanding
stung by the migration of stores. Target’s stock tum- online services. But Cornell
its customers elsewhere, bled more than 12 percent told investors those efforts
pledged Tuesday to spruce and rattled Wall Street, as weren’t enough given the
up its stores and make oth- shares in Wal-Mart, Macy’s accelerating shift of shop-
er investments in its business and other retailers fell as pers to online. Instead of
after delivering weak quar- well. seeing momentum in busi-
terly results and an outlook Target said it will spend the ness, Target has seen three
far below what analysts $7 billion over the next three straight quarters of declines
were expecting. years to remodel more for a key revenue measure
The $7 billion investment than 600 of its 1,800 stores, and declining customer
comes as the retailer said speed up its expansion of counts.
profit for the quarter that in- small-format stores, and This photo shows a Target store in Hialeah, Fla. Target Corp. re- In contrast, Wal-Mart Stores
ported financial results, Tuesday, Feb. 28, 2017. Inc. posted another quar-
(AP Photo/Alan Diaz) ter of higher customer traf-
launch new brands. The plan said the spending was fic and same-store sales
company usually spends necessary in the long term as its efforts to merge its
about $2 billion a year on for the company to regain online services with its vast
such capital investments. its foothold in a market number of stores have
CEO Brian Cornell ac- where shoppers are mov- clicked. Its reemphasis on
knowledged that many of ing online more and more. everyday low prices have
Target’s store are “old and Target said it expects prof- also helped to attract
tired” and haven’t been its to start growing again in shoppers.
updated in years. The com- 2019 but wouldn’t be more Cornell said Target’s results
pany also plans to use the specific. reflect “rapidly changing
backrooms not just to store “Our industry is in the midst consumer behavior, which
merchandise but to double of a seismic shift,” said Cor- drove very strong digital
as mini-distribution points as nell, who also said Target growth but unexpected
Target increases the num- would do better by giving softness in our stores.”
ber of stores that ship di- shoppers compelling value As part of its investment
rectly to online shoppers as as well as great products boost, Target plans to open
it tries to match Amazon’s and a good experience. more than 100 small-format
two-day free deliveries for All traditional retailers have stores in cities near college
Prime customers. struggled as Amazon and campuses. It currently has
Executives who laid out the other online retailers draw 32 of these stores, q