US 'problem banks' soar to 416; highest in 15 years

The Federal Deposit Insurance Corporation (FDIC), the regulator which insures bank deposits, on Saturday, said that the count of problem banks — those at the risk of failing — has soared to 416 as on June 30, 2009.

“At the end of June, there were 416 insured institutions on the ‘problem list,’ up from 305 on March 31. This is the largest number of institutions on the list since June 30, 1994, when there were 434 institutions on the list,” the regulator said.
The total assets of problem entities climbed to US$299.8 billion in the second quarter, the highest level since December 31, 1993.

Moreover, the commercial banks and savings institutions insured by the FDIC incurred losses to the tune of US$3.7 billion in the June quarter.
According to the latest figures, insured institutions charged off US$48.9 billion in uncollectible loans during the quarter, up from US$26.4 billion a year earlier.
“Deteriorating loan quality is having the greatest impact on industry earnings as insured institutions continue to set aside reserves to cover loan losses,” FDIC Chairman Sheila Bair said.