WASHINGTON -- Despite the industry's record earnings, the Federal Deposit Insurance Corp. decided Tuesday to stand by its plan to increase bank premiums in January.

Under the decision, premiums will increase to an average of 25.4 cents for each $100 of domestic deposits. Currently, banks pay a flat rate of 23 cents.

About three-fourths of banks will stay at the 23-cent level; others will pay up to 31 cents depending on their levels of risk.

The FDIC board adopted the new premium schedule on Sept. 15 after scaling back a proposed 28-cent rate, but acting Chairman Andrew Hove promised to reexamine it this month.

With bank profits robust - FDIC Research Director Roger Watson said he expects an aggregate $8 billion in net income for the third quarter - the board decided not to alter its plan.

An $8 billion industry profit would be a record for any quarter, exceeding the $7.6 billion and $7.9 billion, respectively, in the first and second quarters this year.

Record Earnings Year Assured

With earnings for the first nine months around $23.5 billion, the full-year figure will easily surpass the record $24.9 billion reported in 1988. The industry earned $18.1 billion last year.

The board concluded that banks are feasting on unusually wide interest rate spreads, and warned that these may narrow because short-term rates are edging up.

Real estate markets also remain weak in many areas of the country, according to the FDIC.

The FDIC expects deposit premiums to generate $6.6 billion in revenue next year. The agency is under orders from Congress to rebuild the technically insolvent Bank Insurance Fund so that it holds $1.25 for every $100 to insured deposits by 2006.

The FDIC pledged to repeat the pattern of the last two months and review its premium fee structure again at the end of the first quarter next year.

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