WASHINGTON – Earnings at U.S. banks and thrifts plummeted almost 84% for the fourth quarter to a 16-year low of $5.8 billion, as banks and thrifts moved billions of dollars of additional funds into their provisions for loan losses.
The institutions set aside a record $31.3 billion for additional loan losses in the fourth quarter, the FDIC reported yesterday.
The trend is similar to what NCUA reported last week for credit unions, who moved an additional $1.1 billion to their loan loss reserves in the fourth quarter, pushing down net income by 53% for the period.
As was the case with NCUA, the FDIC said it is asking examiners to better monitor troubled institutions and to handle the resolution of failed banks and thrifts.
Banks and thrifts reported a 32.5% increase in loan delinquencies to $26.9 billion, the biggest quarterly rise in 24 years, according to the FDIC.
