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Regulators shut down Dwelling House Savings and Loan Association on Friday

Sunday, August 16th, 2009

Regulators on Fri. shut down Dwelling House Savings and Loan organisation, a small bank in Pennsylvania, boosting to 73 the quantity of federally insured banks that have failed this year.  The Federal Deposit Insurance Company was chosen receiver of the failed bank, found in Pittsburgh, which had $13.4 million in assets and $13.8 million in deposits as of March 31. PNC Bank, a large institution based in Pittsburgh, has agreed to presume all of Dwelling House’s deposits and about $3 million of its assets ; the FDIC will keep the rest for eventual sale. Dwelling House’s lone office in Pittsburgh will reopen Mon. as a branch of PNC Bank, the FDIC related. The FDIC guesses the cost to the deposit insurance fund from the failure of Dwelling House will be $6.8 million.

The 73 bank mess ups countrywide this year compare with twenty-five last year and 3 in 2007. As the economy has soured with unemployment rising, home costs tumbling and loan defaults exploding bank mess ups have cascaded and sapped billions out of the deposit insurance fund.  It now stands at its lowest level since 1993, $13 bln as of quarter one.  While losses on home mortgages could be leveling off, delinquencies on commercial real estate loans remain a hot spot of potential difficulty, FDIC officers say. If the recession deepens, defaults on the high-risk loans could spike.

The amount of banks on the FDIC’s list of problem establishments jumped to 305 in the 1st quarter the highest number since 1994 in the savings and loan crisis from 252 in quarter four. The FDIC expects US bank disasters to cost the insurance fund around $70 bill thru 2013. The May closing of fighting Florida thrift BankUnited FSB is anticipated to cost the insurance fund $4.9 bill, the second-largest hit since the monetary crisis commenced. The costliest was the July 2008 fit of gigantic California bank IndyMac Bank, on that the insurance fund is guestimated to have lost $10.7 bln.

‘COP’ warns that bad assets still threaten banks

Tuesday, August 11th, 2009

In spite of signs the money system has stabilised, banks remain threatened by billions of dollars of bad loans on their balance sheets, and more could fail if the economy gets worse, a congressional watchdog panel says.  10 months into the federal rescue program, the uneasy assets “remain a significant danger to the monetary system,” the report says. “Financial stability stays at risk if the root of the problem of poisonous assets remains unresolved.  In its latest evaluation of the $700 bln financial system rescue, the Congressional Oversight Panel ( COP ) cautions that banks still hold many dangerous loans of uncertain value. If unemployment rises sharply or the commercial real estate market falls down as many financial consultants fear the banking system could again lose its footing, the panel announces in a dispatch to be released Tues. .

“The finance system ( remains ) exposed to the emergency conditions that ( the rescue ) was intended to fix,” the panel wrote in a draft copy of Tues.’s report. The Congressional Oversight Panel was made as a part of the Uneasy Asset Relief Program, or TARP. It is meant to supply an extra layer of oversight, outside the Special Inspector General for the TARP and regular audits by the Government Accountability Office.  The report asserts lots of the Obama administration’s money stability efforts are working including infusions of capital for banks, heightened scrutiny of capital proportions, “stress-testing” of large monetary firms.

It also points towards a public-private investment plan designed to purchase bad assets that still has to get off the ground. But with banks still holding the assets at the guts of the emergency, they remain exposed, the panel says. “These steps have authorized the banks to take major losses while building reserves,” the panel wrote in the draft report. “Nonetheless, fiscal stability stays at risk if the real problem of poisonous assets remains unresolved.

Little banks are particularly exposed, the report says. The troubled assets weighing on their balance sheets sometimes are in the shape of complete loans, as against the mortgage-backed stocks formed from bundles of numerous loans. The Treasury Dept’s main program for grabbing bad assets now targets those instruments and not supposed “whole” loans. Additionally, the report announces, regional and smaller banks hold larger numbers of commercial real estate loans, “which pose a potential threat of high defaults.” it announced the adequacy of small banks’ capital cushions against losses has not been graded by the governing body, which performed “stress tests” in May only on the 19 largest US banks including Bank of America, Capital One Fiscal , Citigroup, GMAC, Goldman Sachs, JPMorgan Chase and Wells Fargo.

Owners of shopping malls, hostels and offices have been defaulting on their loans at a worrying rate, and the commercial real estate market isn’t predicted to hit bottom for 3 more years, industry leaders have claimed. Delinquency rates on commercial loans have doubled the year just gone to 7% as more corporations downsize and outlets close, according to the Federal Reserve. The commercial real estate market’s fortunes are tied closely to the economy, particularly unemployment, which registered 9.4% last month.

As folks get made redundant, or have their hours reduced, they cut spending, which wounds outlets, and they take less trips, influencing hostels and other travel-related businesses. The oversight panel has issued a chain of reports on the governing body’s monetary rescue programs, raising questions about their management and oversight. It is lead by Harvard Law Faculty professor Elizabeth Warren. The other members are Republican Rep Jeb Hensarling ; Richard Neiman, super of banks at the Big Apple State Banking Dep. ; Damon Silvers, associate advocate at the AFL-CIO ; and previous Republican Sen John Sununu of New Hampshire. The new report was adopted by the panel 4-1 Monday with Hensarling voting against it.

Bank of America still struggling in Q2

Monday, August 10th, 2009

BOA’s better than anticipated Q2 profit was energized by the bank’s foreign operations. In its quarterly report filed with the SEC Commission, the bank announced Mon.  it lost $255 million in the US, as losses from failed loans continued to rise. Nearly all of the bank’s revenues of $2.42 billion after preferred dividends came from East Asia, due to a $3.5 bill after-tax gain from B. O. A’s ( BAC ) sale of part of its sake in China Construction Bank. B. O. A’s non-US operations generated $3.48 bln profit, including the gain. Its East Asia operations brought in just about $3.58 bill in the quarter, while its South America and Caribbean operations made $93 million, and Canadian operations saw a $50 million profit.

Operations in Europe, the Middle East and Africa lost $242 million. The results show the struggles the bank, like others, still faces as it makes an attempt to build a worldwide business. Bank of America has about 55 million consumer and small-business purchasers, making it exposed to delinquencies and defaults, yet also prepared to flourish when the economy recovers.

Bank of America claimed it recorded a $13.4 bn. provision for loan losses during the second quarter as consumers wrestled with debt among rising unemployment, compared to $5.8 billion a year back. On a three-way call with researchers last month, B. O. A Chairperson Ken Lewis asserted “profitability in the 2nd half the year will be much stronger than the 1st half,” given the lack of many one off items that were positive to revenues including the China Construction Bank stock sale. The bank has received $45 bln in rescue funds as an element of the Treasury Departments $700 billion fiscal rescue package. It is not known when it’ll pay back the govt.

Capital One Bank

Wednesday, August 5th, 2009

 Capital One Bank, also known as Capital One Financial Corp, is a McLean, Virginia based company. Although Capital One Bank is best known for specializing in credit cards, they also specialize in things like home loans, banking, auto loans, and saving products.

Capital One Bank is a member of Fortune 500, and is a company that really pioneered the mass marketing of credit cards in the 1990’s. As of right now, Capital One Bank is the fourth largest customer of the United States Postal Service, with as much mail as they send out to all of their customers and people they hope to soon be customers. Capital One Bank is the eighth largest deposit portfolio in the United States as well.

In 1988, Capital One Bank was founded by Richard Fairbank and Nigel Morris. The bank itself started off as nothing more than a spin off of Richmond, Virginia-based Signet Banking Corp, which was acquired by First Union in 1997. After Capital One Bank got the New Orleans-based Bibernia National Bank in 2005, they entered into the retail banking market. In November of 2008, Capital One Bank was the recipient of more than $3,555,199,000 of Emergency Economic Stabilization Act Federal bail out.

Capital One Bank has one of the best known credit card programs out there. However, over the years a few people have talked down and criticized the Capital One credit card, saying that they give out multiple credit cards with low limits. This is suppose to increase the chance that people will run into late fees, because they have multiple cards to worry about.

However, others say that this is not the case. In fact, they go on to say that Capital One bank is one of the few credit card companies that will actually give out credit cards to people who have low or no credit, meaning that Capital One Bank is a great way to get started building or rebuilding credit.

Although Capital One Bank is one of those companies that has had its ups and downs, it still remains one of the main places people go when they look for credit cards. In fact, most people know all too well the saying for Capital One credit cards, “Whats in your wallet?” This marketing strategy has proven to be very successive and easy to remember for people and, thus, has been linked back to the success of Capital One Bank.

Whenever people are looking for a bank to count on or a credit card that will not let them down, Capital One Bank is the choice to make. This is a company that has been around a long time and has a very big user base. The company strives to be the best that it can be and make sure that it treats all customers the same. Although there are tons of other credit cards and banks that you can choose from out there, Capital One Bank is, by far, your best choice. With so many people using this service, they cannot be wrong.

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