National Banks' Profits Declined 10% in Quarter
WASHINGTON - Profits of national banks fell 10% in the first quarter, to $3 billion, the Office of the Comptroller of the Currency said Wednesday.
The report on the 3,950 federally chartered banks followed, by one day, a similar report by the Federal Deposit Insurance Corp. on all insured commercial banks. Income of the 12,246 insured banks fell 8.8% to $5.7 billion in the first quarter.
Echoing the FDIC, the Comptroller's office said that bad real estate loans are the industry's biggest problem and the largest banks are the worst performers.
The 34 national banks with more than $10 billion in assets - the group that holds more than half of national bank assets - saw earnings plunge 40%, to $800 million, from $1.3 billion in the 1990 first quarter. Their aggregate return on assets dropped to 0.34%, from 0.58%.
The return on assets for all national banks sank to 0.62%, from 0.67% a year earlier.
Nonperforming loans rose $3.4 billion, to $55.2 billion, during the first quarter. The total is $12.9 billion higher than in 1990's first quarter.
Of the $55.2 billion, bad real estate loans accounted for $28.2 billion and foreclosed property for $16.9 billion. Real estate owned by national banks climbed $7.3 billion over the year-earlier level.
National banks in the 1991 period set aside $4.5 billion to cover potential loan losses, $400 million more than a year earlier.
By region, national bank earnings trends were mixed:
* Northeast: Net income of $240 million in the first quarter was down from $259 million in last year's period.
* Southeast: $280 million, down from $420 million.
* Southwest: $170 million, up from $102 million.
* West: $440 million, up from $421 million.
* Midwest (Missouri and Kansas north to the Dakotas and Minnesota): $270 million, up from $250 million.
* Central (Ohio west to Wisconsin): $700 million, up from $575 million.