*FDIC: Banks' Business Loan Losses Rise In 4Q 2001
DOW JONES NEWSWIRES
WASHINGTON -- Banks reported another increase in noncurrent commercial and industrial loans during the fourth quarter of 2001, the Federal Deposit Insurance Corporation said Wednesday.
Based on preliminary data, noncurrent commercial and industrial loans - which represent about 25% of the $3.9 trillion in loans at all 8,080 FDIC-insured banks - grew to $23.6 billion at the end of 2001, the agency said.
That figure represents 2.4% of all commercial and industrial loans, well below the record 5.9% reached in 1987, the FDIC said.
"New announcements of corporate bankruptcies, debt defaults and ratings downgrades suggest that commercial lending problems will continue in the first quarter of 2002," the FDIC said.
The amount of noncurrent business loans has risen nearly every quarter since early 1998.
Large banks have been particularly hard hit through some of their major borrowers, the FDIC said. During the fourth quarter, noncurrent loans at banks with assets of more than $1 billion were 1.5% of their total, while noncurrent loans at banks with less than $1 billion in assets were 0.98% of their total.
Business loans had higher noncurrent rates than other types of loans, illustrating the uneven effects of what has been termed a business recession, the FDIC said.
But the recession's impact on consumers is becoming more apparent. Consumer loan delinquencies and chargeoffs are picking up at banks of all sizes, with credit-card debt playing an important role, the agency said.
"Despite these adverse trends, banks continue to maintain high levels of capital and reserves," the FDIC said, citing end-2001 equity capital in the industry at 9.10% of assets, up from 8.49% a year earlier.
On the Web: www.fdic.gov
-By Campion Walsh; Dow Jones Newswires; 1-202-862-9291; campion.walsh@dowjones.com
Updated February 27, 2002 11:38 a.m. EST |
