US bank earnings plunged nearly 25% in the third quarter, falling below $30bn for the first time since 2003 as the sagging US housing market hit profits, according to government data. Financial Times

Net income for banks in the period fell to $28.7bn, down $9.4bn from last year driven by a steep increase in provisions for loan losses and a drop in non-interest income, according to the Federal Deposit Insurance Corporation.

Loan loss provisions rose $9.2bn, or 122%, to $16.6bn compared to the same period a year earlier, the most made since the second quarter of 1987 and the second highest ever. Nearly half of all US banks reported annual earnings declines, largely as the result of the weakening US housing market, the FDIC said.