Capital Briefs: S&Ls Cut Chargeoffs in Biggest Loan Group

The chargeoff ratio for the thrift industry's largest loan category - one- to four-family home mortgages - fell to 0.17% last year, from 0.25% in 1994, the Office of Thrift Supervision reported Tuesday.

However, writeoffs of other types of loans increased. The OTS reported that chargeoffs of nonresidential construction loans jumped to a ratio of 0.67% in 1995, from 0.46%, and the ratio for multifamily mortgages rose to 0.46%, from 0.27%.

"These recent trends highlight the need for continuing close supervisory attention to ensure that thrifts do not allow their credit standards to deteriorate," said John Downey, the agency's executive director for supervision.

The OTS also reported that the industry had cut its net chargeoffs nearly in half during the past four years. The overall ratio of chargeoffs to assets at the end of 1995 was 0.36% compared to 0.70% at yearend 1991.