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Number of problem US banks soars Number of problem US banks soars
(about 1 hour later)
The number of problem US banks jumped 40% to a 15-year high in the first three months of the year, an industry watchdog has warned. The number of problem US banks jumped 40% to a 15-year high in the first three months of the year, a government watchdog has warned.
A total of 305 banks had financial woes in January-March, up from 252 in October-December, said the Financial Deposit Insurance Corporation (FDIC). A total of 305 banks had financial woes in January-March, up from 252 in October-December, said the Federal Deposit Insurance Corporation (FDIC).
The increase came as banks continued to grapple with bad mortgage and credit card debt amid the recession.The increase came as banks continued to grapple with bad mortgage and credit card debt amid the recession.
At the same time, industry-wide banking profits also rose in January-March.At the same time, industry-wide banking profits also rose in January-March.
The FDIC said profits across the industry hit $7.6bn (£4.7bn) in the first quarter of 2009, led by higher revenues at the biggest banks as their trading performance recovered.The FDIC said profits across the industry hit $7.6bn (£4.7bn) in the first quarter of 2009, led by higher revenues at the biggest banks as their trading performance recovered.
This profit compares with a record loss of $36.9bn for October-December, but is still down 61% on the $19.3bn profit record for January-March last year.This profit compares with a record loss of $36.9bn for October-December, but is still down 61% on the $19.3bn profit record for January-March last year.
Under US law, the FDIC insures consumer bank deposits and has the power to take over failing banks.