P.M. BRIEFING : Real Estate Saps Bank Profits
Continuing deterioration of real estate markets in northeastern states depressed commercial bank earnings by 29% to $3.75 billion in the July-September quarter, the government said today.
L. William Seidman, chairman of the Federal Deposit Insurance Corp., predicted more difficulties ahead for banks, and he raised his estimate of 1990 losses to the government insurance fund that backs deposits. He said he expects the fund to lose about $4 billion, dropping the reserve to about $9 billion. Three months ago, he estimated the loss at $3 billion.
Third-quarter earnings of $3.75 billion slipped from $5.4 billion in the April-June period and from $6.3 billion in the first three months of the year. Still, 89% of the nation’s 12,399 commercial banks earned money.