US 'problem' banks jump to 884 in December quarter: FDIC

WASHINGTON: Indicating that American banking system continues to remain jittery, the count of problem banks -- those at risk of failing -- rose to 884 in the October-December quarter of 2010.

Although not large players, these banks have assets worth about $ 390 billion, according to the latest figures from the Federal Deposit Insurance Corporation ( FDIC).

"The number of institutions on the 'problem list' rose from 860 to 884 (in the fourth quarter of 2010). Total assets of 'problem' institutions increased to $ 390 billion from $ 379 billion in the prior quarter," the report said yesterday.

FDIC, which insures deposits at more than 8,000 US banks, also acts as caretaker for failed entities.

Last year, a staggering 157 banks went belly up. High unemployment has resulted in rising defaults, which is adversely impacting small and medium banks.

So far this year, 22 banks have been shut down. "As we have repeatedly stated, we believe that the number of failures peaked in 2010, and we expect both the number and total assets of this year's failures to be lower than last year's," FDIC Chairman Sheila C Bair said.

On the other hand, commercial banks and savings institutions insured by the FDIC raked in a profit of $ 21.7 billion in the fourth quarter of 2010.

In the year-ago period, these entities had incurred a loss of $ 1.8 billion.