Bank charge-offs jump 42% to record $34.5 billion
WASHINGTON (MarketWatch) - Bank loans were going bad at a faster pace in the fourth quarter of the year, forcing banks to charge-off a record $34.5 billion in delinquent loans, the Federal Reserve reported Tuesday.
The seasonally adjusted delinquency rate for all bank loans rose to 4.6% in the fourth quarter from 3.7% in the third quarter. That's the highest delinquency rate since 1992 in the aftermath of the savings & loan crisis. A year ago, the delinquency rate was 2.4%.
Delinquencies were growing faster last quarter than at any other time since the Fed started collecting the delinquency data in 1985.
For residential real estate, the delinquency rate rose to a record 6.3% in the fourth quarter from 5.2% in the third quarter and 3% a year earlier.
Consumer credit card delinquencies rose to a record 5.6% from 4.8% in the third quarter.
Delinquencies for commercial real estate loans increased to 5.4% in the fourth quarter from 4.7% in the third, and double the rate a year earlier.
The charge-off rate increased to 1.9% from 1.5% in the third quarter, with banks charging off a record $35.5 billion, up from $24.2 billion in the third quarter and $13.9 billion in the fourth quarter a year earlier.Powered by ScribeFire.
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