Falling rates helped S&Ls profit in '91

March 11, 1992|By Robert A. Rosenblatt | Robert A. Rosenblatt,Los Angeles Times

WASHINGTON -- Federal regulators said yesterday that falling interest rates and government takeovers of troubled thrifts helped the nation's savings and loan industry earn nearly $2 billion in 1991, putting an end to four years of massive losses.

Timothy Ryan, director of the Office of Thrift Supervision, termed the performance a milestone. He said the industry is stabilizing after being rocked by hundreds of failures caused by bad loans, risky investments and widespread fraud.

"I believe we are now in the eighth inning of the cleanup process," Mr. Ryan said.

The OTS said the 2,096 private-sector institutions earned $1.97 billion in 1991, in contrast to a loss of $2.9 billion in 1990. The industry recorded losses of $43.3 billion in the four years beginning in 1986.

Mr. Ryan said the number of financially crippled thrifts, headed for seizure by the government, is dwindling rapidly. In December 1989, regulators listed 377 thrifts with assets of $261 billion as candidates for failure; today, there are only 55 with $35 billion in assets.

In the past three years, more than 600 S&Ls have been seized and dismantled by the Resolution Trust Corp. The government has spent $80 billion on the S&L cleanup and might ultimately spend more than $400 billion.

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