US sees 64 bank collapses in just 4 months; 23 fold up in April

NEW YORK: The count of American bank failures are climbing by the day, with a staggering 64 entities closing down in 2010.

Out of the total collapses, as many as 23 banks were shut down by the authorities in April, the highest for any month this year.

Moreover, seven banks went belly up last Friday, resulting in a whopping expense of more than USD 7.3 billion to the Federal Deposit Insurance Corporation (FDIC). The federal agency insures deposits at over 8,000 US banks.

Indicating that the country's banking sector continues to be weak, the total number of failures this year translates to about 15 entities on an average shutting down every month.

The latest entities to bite the dust are Westernbank Puerto Rico, Eurobank, Frontier Bank, BC National Banks, Champion Bank, R-G Premier Bank of Puerto Rico and CF Bancorp, according to the FDIC.

Out of them, the failure of Westernbank Puerto Rico, Frontier Bank and R-G Premier Bank of Puerto Rico, would cost the FDIC more than USD 5.9 billion.

The number of collapses are expected to rise in the backdrop of high unemployment levels, which is resulting in increased defaults especially at small and medium banks.

In March, 19 banks were closed down, while the count stood at 7 and 15 in February and January, respectively.

Last year, 140 banks were closed down by the authorities as the economy was ravaged by one of the worst financial meltdowns.

Meanwhile, the US economy is growing at a healthy pace and grew 3.2 per cent in the first three months of 2010.