The Office of the Comptroller of the Currency on Tuesday warned banks, particularly small ones, that their interest income will continue shrinking over the next several quarters.

Commercial banks suffered an 18-basis-point decline in the ratio of net interest income to assets in the second quarter of 1999, compared with the same period two years earlier, according to the agency's latest quarterly "Condition of the Banking Industry" report. It fell to 3.51% for the three months ended June 30, versus 3.69% in the second quarter of 1997.

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