The number of US banks listed as “problems” by regulators declined at the end of June for the first time in five years, the Federal Deposit Insurance Corporation said Tuesday.
After having shut 394 big and small banks during the period of the financial crisis, the FDIC said its list of troubled financial institutions was finally slimming, to 865 at the end of the second quarter from 888 after the first quarter. “This is the first time since the third quarter of 2006 that the number of ‘problem’ banks fell,” said the FDIC, which guarantees bank deposits and monitors bank health.
The FDIC began forcing insolvent banks and savings institutions to shut, and transferring their assets to stronger institutions, at a fast pace beginning in 2007 as the collapse of the housing market shook the industry and sent the economy into recession.
So far this year 68 banks, most of them small community institutions, have been closed down.
The FDIC also said that aggregate profits at banks and savings institutions it insures were up at the end of June to $28.8 billion from $20.9 billion a year earlier, and that only 15.2 per cent of the banks reported losses.
It also said that asset quality had improved for the fifth straight quarter, with write-offs of uncollectable loans totalling $28.8 billion in the quarter, 42.1 per cent lower than a year earlier.
Washington, Aug 23, 2011 (AFP)
