Troubled loans soar
Banks’ troubled assets rose 149 percent in 2008, according to an analysis of more than 8,000 U.S. banks’ financial reports to the federal government conducted by MSNBC.com and the Investigative Reporting Workshop at American University in Washington, D.C.
Most banks were still healthy at the end of the year, but 163 ended the year with more troubled loans than capital, up from only 13 a year earlier. Seven out of every 10 banks were less prepared to handle their potential loan losses than a year earlier.
According to MSNBC, the data shows how the widespread the problems in the banking industry became in 2008.
It has published information on the nation’s 400 largest at www.msnbc.msn.com/id/29619236.
The analysis shows that 163 banks, or 2 percent, were above the troubled asset ratio of 100 percent, a sign of severe stress, in 2008, and 2,308 banks, or about 28 percent, were past the 20 percent ratio, which some analysts say is an early warning sign of trouble.
Bankers and regulators point out that the troubled asset ratio is more of a snapshot in time and that some unhealthy banks have improved through government supervision, better management, injections of capital or because borrowers who were behind on payments have gotten up-to-date on payments.
The figures also do not reflect the recent infusion of nearly $250 billion through the Troubled Asset Relief Program.