Thrifts nationwide are moving into the high-profit-margin land of subprime lending, but analysts and regulators warn they could find the volatile sector rough going.

"Everyone, behind the scenes, is looking at it," said Carl B. Webb, chief executive of California Federal Savings Bank, Los Angeles. Mr. Webb said he has been eyeing the market for the past year and has even bid on a few deals. "We've had an interest for some time in subprime auto and mortgage lending ... there's a good profit potential there," he said.

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