Feds Concerned About Banks

Fri., Sept. 22, 2000

Federal regulators say the nation’s banks are in trouble, pointing to an easing of lending standards and declining earnings amid a strong economy as obvious warning signs.

The FDIC reported Thursday that U.S. bank profits dropped to $14.7 billion in the April-June quarter, down from $17.1 billion in the second quarter of 1999 and the lowest level since the same period in 1997.

For the first time in 7-1/2 years, the banking industry’s return on assets, a key yardstick of profitability, dipped below 1 percent, to 0.99 percent.

At the same time, problem loans by nationally chartered banks to U.S. businesses have more than doubled in two years, to $100 billion, according to a survey by a Treasury Department division released Wednesday.

The survey by the Comptroller of the Currency’s office also found that consumer lending standards have continued to slacken in such areas as home-equity loans.

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Feds Concerned About Banks

Jesse Tinsley

Jim Meehan

Molly Quinn

Rob Curley

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