As the Clinton administration for more money to pay for failed thrifts, the numbers of institutions likely to fail has dwindled to fewer than a half dozen. according to government sources.

The dramatic decline in the number of problem institutions is the latest indication that the Resolution Trust Corp. may not need all of the $18.3 billion that has been approved by the full Senate and the House Banking Committee.

Instead, the cost appears more in line with earlier General Accounting Office estimates that pegged the agency's funding needs at about, $12 billion.

Still, the administration is continuing to argue for the $18.3 billion -- an amount that already represents a significant cut from the $25 billion it originally sought for the bailout agency.

Very few S&Ls that have disappeared from the Office of Thrift Supervision's confidential problem list have been taken over by the federal government. Instead, the industry has benefited from widening profit margins and a strong market for its securities, and that has left few institutions still at risk of being closed.

|Uncertainties Remain'

"While we hope that the current favorable condition in the S&L industry will continue, considerable uncertainties remain," said Frank Newman, the Treasury Department's undersecretary for domestic finance. "We think it would be prudent to have this funding available. None of it will be spent if it is not needed."

Improved profits have eased some institutions off the list, while others -- including the nation's fifth-largest thrift, California's Glendale Federal Bank -- escaped by raising equity capital. If the thrift had been turned over to the RTC, taxpayers' tab for it alone would have been $3 billion to $5 billion, according to company estimates.

List Grows Shorter

In late August, about six relatively small thrifts remained on regulators' internal list of savings and loans that might have to be taken over by the federal government, and they may recover by the end of the month, said government officials familiar with the problem list. By contrast, 90 institutions were on that list at the beginning of the year, the officials said.

However, the RTC cannot liquidate the 71 thrifts, with about $33 billion in assets, already in its inventory without additional funding from Congress.

Leaving those failed thrifts open and having the RTC run them rather than liquidate them costs taxpayers roughly $3 million a day, according to the RTC.

In addition, one government official familiar with the liquidation effort cautioned that the bailout agency may have underestimated the cost of dealing with thrifts already in its inventory.

An OTS spokesman said in August that since late December 1992, 64 problem thrifts with $53 billion in assets raised capital and made it off the agency's problem list.

He said the agency was updating that internal list, and would disclose its results on Thursday, when it reports the thrift industry's second-quarter earnings.

House Expected to Act Soon

Under current law, the RTC will stop taking over failed thrifts at the end of this month but will continue selling seized institutions and assets before shutting down entirely at the end of 1996. Any failed thrifts or their assets left when the RTC shuts down are slated to go to the FDIC. Mr. Katsanos said.

The House is expected to take up legislation soon that would add $18.3 billion to the RTC's budget and permit it to continue taking on failed thrifts until March 31, 1995. The agency would terminate all operations a year later under the bill.

The bill that is expected to go to the House floor would also give $8 billion to the Savings Association Insurance Fund to deal with future failures.

Loss Reserves

The RTC has $4 billion in reserve funds, but that is not enough to finish the S&L cleanup, said Stephen Katsanos, the agency's spokesman.

"We stand today with 71 institutions in conservatorship, and we don't know how many more we're going to be getting, but I think it would be a stretch to assume that the money we have now in our loss reserves would be adequate," he said.

Because the RTC spends money as it resolves thrifts week to week -- rather than receiving a lump-sum allocation -- the agency would not spend all that Congress authorizes if it can resolve all the failed S&Ls for less, Mr. Katsanos said.

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