While overall industry profits fell 8.6% in the third quarter, a major U.S. bank regulator added two banks with a combined asset value of almost $84 billion to its list of “problem banks.”
Firms placed to the list, which includes banks with exceptionally low confidential scores from bank supervisors, are usually not identified by the Federal Deposit Insurance Corporation. According to FDIC Chairman Martin Gruenberg, the current figure of 68 troubled banks is “not atypical.” However, he also noted that it is a “consequential development” for specific businesses that entails more scrutiny.
At a news conference, he stated, “We definitely pay close attention, especially to the individual institutions that may be having heightened supervisory issues relating to the downgrades.”
Larger companies were added to the problem bank list about a year and a half after Silicon Valley Bank’s sudden failure sparked widespread unrest in the banking industry, which failed two additional regional companies and prompt regulatory action to support the system.
After banks experienced a one-time spike in profits in the previous quarter, the FDIC announced on Thursday that quarterly profits for the banking industry were somewhat lower. The primary cause of the somewhat reduced profits was banks’ reporting of one-time gains on equity securities trades in these second quarters.
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