BUSINESS

34 US banks fail in 2009; BankUnited collapses

Source:PTI
May 22, 2009 17:45 IST

In one of the biggest bank failures in the United States in 2009, Florida-based BankUnited has been shut down by the authorities, pushing the total number of such collapses to 34 so far this year.

The entity was seized by the Federal Deposit Insurance Corporation (FDIC), which is often appointed as the receiver of failed banks and was later sold.

"BankUnited, a newly chartered federal savings bank, acquired the banking operations, including all of the non-brokered deposits, of BankUnited, FSB, Coral Gables, Florida. . .," the FDIC said in a statement.

The failed bank had assets worth $12.80 billion and deposits to the tune of $8.6 billion as on May 2.

According to the statement, new BankUnited would assume $12.7 billion in assets and $8.3 billion in non-brokered deposits.

"The FDIC and BankUnited (new) entered into a loss-share transaction and will share in the losses on approximately $10.7 billion in assets covered under the agreement," it added.

The recession-hit American economy has already seen the collapse of 48 banks since the global financial crisis turned for the worse in September 2008, when the famed Lehman Brothers filed for bankruptcy.

Since the start of this year, 34 banks have gone belly up which translates into an average of a little over six banks every month.

Bearing the brunt of the economic turbulence, many of the regional and smaller banks have gone belly up this year.

In 2008, the total number of bank failures stood at 25. Altogether 59 banks have collapsed since January 2008. First Bank of Idaho, Heritage Bank, American Southern Bank, Great Basin Bank of Nevada, New Frontier Bank and Freedom Bank of Georgia, are among the entities which have failed in 2009.

Earlier this month, the Obama administration directed 10 leading bank holding companies to raise as much as $75 billion in additional capital, following the rigorous stress tests.

Source: PTI
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