The number of problem-ridden US banks rose to the highest levels in 17 years in the second quarter even as earnings in the sector as a whole showed improvement, regulators said Tuesday. The Federal Deposit Insurance Corporation said the number of institutions on its "problem list" rose more than seven percent to 829 in the second quarter from 775 in the first three months of the year.
The number of problem banks was the highest since March 31, 1993, when there were 928, the FDIC said in a report. American banks were among the worst hit by the financial crisis that stemmed from a home mortgage meltdown and plunged the world's largest economy into recession in December 2007. The crisis peaked in the later part of 2008 with the collapse of Lehman Brothers in the largest bankruptcy in history.
Forty-five insured banks failed during the second quarter, the FDIC said. FDIC-insured commercial banks and savings institutions reported an aggregate profit of 21.6 billion dollars in the second quarter, an improvement from the 4.4-billion-dollar loss the industry posted in the same period in 2009.