Higher loan losses hit US regional banks

FT ^ | 21 Oct 2008 | Saskia Scholtes

[BGHater]

Higher loan losses weighed on quarterly results at a clutch of US regional banks on Tuesday amid continued consumer weakness and turbulence in financial markets.

Ohio’s largest banks all suffered losses. National City said it planned to cut about 4,000 jobs, or 14 per cent of its workforce, over the next three years after the bank posted a net loss of $729m, or 85 cents a share. Fifth Third reported a quarterly loss of $56m, or 61 cents per share, and KeyCorp lost $36m, or 10 cents per share.

Profits fell at US Bancorp, which operates in the western two-thirds of the country, as well as at south-east bank Regions Financial and at M&T Bank, based in the mid- Atlantic region. US Bancorp said profits dropped 47 per cent to $576m. Regions’ profits fell 80 per cent to $79.5m and profits at M&T Bank fell 54 per cent to $91.1m.

All the banks more than doubled their reserves for loan losses from a year earlier, and net write-offs for bad loans also soared. “We have experienced the most severe financial crisis any of us has known in our business lifetime,” said Henry Meyer, chief executive of KeyCorp.

The results echoed signs of deteriorating consumer credit and further housing weakness at big rivals such as Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, which have experienced losses on mortgages and credit card loans. Regional banks have suffered from losses on second mortgages and residential construction and development loans.

[BGHater]

If your worried about your bank check with a local Credit Union. They, as a majority, didn't fool around with crazy loans.

[rsobin]

Most of the regional banks have little or no direct exposure to the sub prime market directly. The same is even more true of credit unions. But both regional banks and credit unions have had major write downs in assets thanks to the devaluation in real estate cause by the combination of sub prime defaults, traditional mortgage defaults, and the heads I win tales you lose banking practices, bankers and brokers used to finance this fiasco, also with the help of nothing but stupid deregulation. So no banks or other financial institutions are doing very well right now, albeit some much worse than others. The push for deregulation must have assumed human nature somehow has changed in the last eighty years. What has happened here , what the Wall Street CEO’s and managers were allowed to do , and did do is treasonist.