Bank profits plunge 84 percent in 4Q

ALAN ZIBEL
Business Week
February 26, 2008

The quarterly banking industry statistics, compiled by the Federal Deposit Insurance Corp., highlighted a dramatic deterioration in the fourth quarter as major Wall Street banks such as Citigroup Inc. took large write-downs in the value of their assets to reflect losses on mortgage-related investments.

Profits at federally insured banks and thrifts plunged to a 16-year low in the fourth quarter as institutions set aside a record-high amount to cover losses from bad mortgages, data released Tuesday show.

The quarterly banking industry statistics, compiled by the Federal Deposit Insurance Corp., highlighted a dramatic deterioration in the fourth quarter as major Wall Street banks such as Citigroup Inc. took large write-downs in the value of their assets to reflect losses on mortgage-related investments.

“Weakness in the housing sector and the credit squeeze in financial market made it a very challenging time for many institutions,” said Sheila Bair, the FDIC’s chairman. “We can expect these problems to continue throughout 2008.”

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