34% Drop in Bank Profits Blamed on Weak Land Market
Weakening real estate markets across the United States drove banking industry profits down 34% last year, said a study issued today by a leading bank analysis firm.
Sheshunoff Information Services Inc. said national profits slumped to $15.8 billion.
Unprofitable banks were concentrated in six states, led by New York, Texas and Arizona. Losses in those states, respectively, were $3.1 billion, $567 million and $491 million.
Money center banks accounted for a large share of the 1989 decline, the study said. Of the 44 U.S. banks with assets of more than $10 billion, 11 lost money last year, according to the report.
Among the 10 largest U.S. banks, the seven based in New York, with combined assets of $508.2 billion, lost $3.7 billion. Their losses stemmed heavily from increased provisions for losses on Third World loans.
California banks had the largest 1989 profits, at $3.4 billion. Illinois banks ranked second, at $1.8 billion.
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