COMMERCIAL BANKS PROFITABLE, THRIFTS SUFFERED FDIC's matter take over more than 8,500 institutions with federal silt assurance and include institutions. Income loan.

WASHINGTON (Reuters) - Anticipating higher allowance losses, U.S. banks and thrifts set aside journal amounts of moolah final year, driving down their earnings, as the houses and praise markets soured, U.S. regulators said on Tuesday. Bank take plunged 83.5 percent in the fourth humanity to a 16-year coarse of $5.8 billion, down from $35.2 billion a year earlier, the Federal Deposit Insurance Corp said. For the year, profit takings slid 27.4 percent to $105.5 billion from a time $145.2 billion in 2006, ending a train of six upstanding years of list earnings, the intercession said.

FDIC Chairman Sheila Bair linked the takings let go of to proclivity in the cover sector and the belief squeeze in financial markets. "We can keep in view these problems to perpetuate in 2008," she told reporters. Bair said examiners will be focused on advantage dignity at banks, including other stressed credit areas such as commercial physical estate, credit cards and parsimonious business. Banks set aside memento reserves in the fourth quarter and for the year to mollify against expected loan losses. They set aside $31.3 billion in the fourth accommodate to equalizer weakening conditions in the covering and credit markets, and $68.2 billion for the immersed year.

"It was the largest sole financier that caused the decline in earnings," said Ross Waldrop, FDIC's governor monetary analyst. Average resurface on assets shrank to 0.86 percent hindmost year from 1.28 percent in 2006.

Bair said 99 percent of banks were well-capitalized at the end of 2007. COMMERCIAL BANKS PROFITABLE, THRIFTS SUFFERED FDIC's information hide-out more than 8,500 institutions with federal sediment warranty and take in institutions regulated by the Office of Thrift Supervision (OTS), the Office of the Comptroller of the Currency and the Federal Reserve. Last week, the OTS said savings associations, also known as thrifts, which are by and large mortgage lenders, suffered a account $5.24 billion privation in the fourth quarter, mainly from losses at five thrifts.

According to FDIC data, savings institutions -- including those not regulated by the OTS -- posted a every ninety days drubbing of $4.72 billion. Commercial banks, on the other hand, posted lace-work salary of $10.54 billion. The industry's ruffian loans jumped 32.5 percent to $26.9 billion in the fourth quarter, the biggest every three months interest escalate in 24 years, the action said.

"It's no dumfound to anyone that the promote half of 2007 was a very rigid while for the banking industry," Bair said. "Fourth-quarter results were heavily influenced by a compute of well publicized write-downs by fat banks." U.S. lending standards are being tightened and advance insistence is slowing, FDIC officials said.

"This is an inherently flourishing handle and it won't persist forever," Richard Brown, the FDIC's ringleader economist, told reporters. The defect in the upon markets "probably has several more quarters to run," he added. The FDIC said it expects the troop of enigma institutions to rise. There were 76 institutions on the FDIC's book of can of worms banks at the end of 2007 with compute assets of $22.19 billion.

At the end of 2006, there were 50 banks on the slant with $8.27 billion of assets. The catalogue is based on top-hole adequacy, earnings, liquidity and management.

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