Banks and saving institutions in the US appear headed for their first overall quarterly loss since 1990, as troubled loans pile up faster than the federal government's unprecedented efforts to aid the battered industry, a media report said.Ever since posting a combined profit of $1.7-billion in the third quarter, already a 94 per cent plunge from a year earlier, life has gotten even worse for the roughly 8,300 financial institutions with deposits backed by the Federal Deposit Insurance Corp, the leading financial daily Wall Street Journal said.
Rising unemployment is causing more agony from old problems such as shaky mortgages and credit cards, and losses now are spreading to commercial real-estate loans, it added.
"The earning power for this industry has absolutely collapsed," it quoted Eric Hovde, chief executive of Hovde Capital Advisors LLC, a money-management firm in Washington that specialises in financial services, as saying.
Nearly a quarter of the US financial institutions, the Journal said, reported a net loss for the quarter ended September 30. The percentage is likely to climb when fourth-quarter results are announced in January, with some analysts predicting that even stalwarts like J P Morgan Chase & Co could tumble into the red.
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