U.S. banks will receive losses for the first time since 1990

Absolutely, all American banks may fix the damages up to the last quarter of the year. A similar situation was observed for the last time in 1990. In the third quarter of 2008, overall profits of U.S. financial institutions amounted to 1.7 billion dollars, which is 94% below the same period last year. Since then the situation has worsened for about 8,300 banks, deposits are guaranteed by the Federal Deposit Insurance Corporation U.S. (Federal Deposit Insurance Corp., FDIC). Rising unemployment brings new challenges, in addition to questionable loans on mortgages and credit cards, in addition, the losses are beginning to spread to commercial real estate. "The potential earnings for the banking industry is completely relaxed," - says Eric Hovde, chief executive officer of Hovde Capital Advisors, which specializes in financial services. Approximately a quarter of U.S. banks recorded a net loss in the third quarter of this year. In the fourth quarter, this percentage may increase, some analysts predict that the loss-making will become even such persistent banks such as JPMorgan Chase & Co. Forecasts of analysts polled by Thomson Reuters, for JPMorgan range from a loss of 20 cents per share to earnings of 71 cents per share. In the event that the bank's profit will correspond to the average forecast of experts to 11 cents a share, in general, it will reach 410 million dollars, up 86% below the fourth quarter of 2007, "Interfax" referring to The Wall Street Journal. Gloomy fourth quarter is an unpleasant signal to the industry in 2009. The U.S. government has already invested 169 billion dollars in more than 130 financial institutions through the Troubled Asset Relief Program, according to data Keefe, Bruyette & Woods. But some banks are already looking for new sources of funds, or make provisions for fear of another terrible year. Fifth Third, which received 3.45 billion dollars of government assistance, two weeks ago reduced its quarterly dividend to 1 cent from 15 cents per share. In June, the bank reduced the dividend for the first time in three decades. The head of Fifth Third Kebet Kevin said that the recession and job losses have contributed to the "very difficult situation" in the banking industry, noting: "We do not expect improvements in the short term." Over the past few weeks, some analysts have lowered forecasts of corporate profits for 2009 and projected stock quotes for a number of large and small banks. These experts expect unemployment will trigger deepening losses on credit cards and mortgages, as taxpayers will be late with repayment of their debts. Simultaneously with the appearance of problems in the field of commercial real estate loans and other types of loans, many banks will be forced to increase reserves for possible loan losses, which would further worsen the performance of their profits.