Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Tue, May 26 1992 Date: Tue, 26 May 92 05:20:39 EDT Message-ID: 05-26 0000 DECISIONLINE: Banking & Economy USA TODAY Update May 26, 1992 Source: USA TODAY:Gannett National Information Network BANKS TRY TO REBOUND: U.S. banks were aggressively restructuring last year according to a USA TODAY study. They sold businesses that didn't make money or weren't worth management's time. They shored up loan-loss reserves and raised capital. They waited out the recession by investing deposits in super-safe government securities instead of loans. And many were busy trying to get out from under bad loans. (For more, see special Banks package below.) PEROT MAY BE SHORT SELLER: A financial report filed with the Federal Election Commission suggests that Ross Perot may be short selling stocks. Evidence of Perot's trades: A series of stock loans - made to investors who want to sell short - from his brokers. Short sellers borrow stock when it's high, sell if the price falls and buy it back at a lower price. In the past, Perot has criticized stock speculation. PEROT MOVES ANALYZED: Some of Ross Perot's deals, detailed in financial statements, look like bets against troubled firms. Others seem to be deals against popular stocks that look overpriced. Examples: Perot borrowed shares of Citicorp - which faces huge real estate losses - in December and March; Perot in September borrowed shares of biotechnology firm Centocor, which has tumbled 77% since that time. MORTGAGE RATES FALL: Mortgage rates fell for the fourth straight week last week, to an average 8.53% on 30-year fixed-rate loans, from 8.64% the week before, according to the Federal Home Loan Mortgage Corp. Also, the average one-year adjustable-rate mortgage was 5.93%, down from 5.97% the week before. The average rate on 15-year fixed mortgages was 8.16% last week vs. 8.26% the previous week. GM TO FOCUS ON PROFITS: General Motors is turning its attention to profits and away from regaining market share from the Japanese, officials said Friday at GM's annual shareholders meeting. "If market share is going to come at a cost of profitability, we're going to back away from market share," GM's new president John F. Smith Jr. said after the meeting. MACHINE TOOL ORDERS FALL: Orders for U.S.-made machine tools fell 9.4% to $220 million in April from March but were up 13.6% from a year earlier, the Association for Manufacturing Technology reported Sunday. A decline in export orders, however, shows machine-tool makers can no longer rely on foreign markets to make up for slack domestic demand, said AMT President Albert Moore. SUMMER LOOKS WARM, NOT HOT: As summer unofficially begins, most economists think the economy will not heat up much in the coming months, but will stay warm. "I don't think it's going to sizzle," says James Coons, chief economist at Huntington National Bank in Columbus, Ohio. "It will stay warm, maybe even roast a bit." But optimism is cautious because an early-year recovery last year fizzled during the summer. REPORTS DUE THIS WEEK: It's a big week for economic reports. Here's what economists surveyed by consultants MMS International Inc. expect: Tuesday, the Conference Board is expected to say consumer confidence was up in May; the National Association of Realtors is expected to say sales of previously owned homes fell 1% in April. Reports on orders for durable goods and GDP come later this week. SPECIAL PACKAGE ON BANKS: BANKS MAY HAVE PAST WORST: A USA TODAY analysis of the USA's 12,296 commercial and savings banks at the end of 1991 suggests the industry may have put the worst behind it - though problems remain. "It's hard to deny the improvement," says William Taylor, chairman of the Federal Deposit Insurance Corp. "A year from now, I think you'll be writing things are better, but there were some bumps along the way." FEWER TROUBLED BANKS: The number of banks listed as troubled by the analysis dropped to 375 from 464 a year ago and 533 two years ago. Banks made the list if their problem assets at the end of 1991 exceeded capital and reserves. The list has shrunk because the number of banks leaving the list - banks that failed, returned to health or merged with another bank - has exceeded the number getting into trouble. CITIBANK ON TROUBLED LIST: The nation's biggest bank - Citibank - is among the 375 banks on the troubled list, making it the first top-10 bank to make the list since its debut in 1990. As of Dec. 31, 1991, Citibank's problem assets were equal to 113% of its capital and reserves. The bank - a subsidiary of Citicorp - is weighed down by troubled real-estate loans. It lost $470 million last year. BANK EARNINGS RISE: Bank earnings climbed 20% last year, to $17.7 billion. And more banks were profitable - 88%, vs. 86% in 1990. Falling interest rates were the main reason earnings surged. Banks cut the rates they paid depositors faster than the rates they charged borrowers, and profited from the fatter margins. Gains on securities sales accounted for about $2 billion of last year's earnings increase. (End of package.) DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Tuesday at 3386.77, after closing up 8.06 Friday. The market was closed Monday for the Memorial Day holiday. The New York Stock Exchange composite opens at 228.20, up 0.73. The American Stock Exchange market value opens at 392.46, up 0.83. The NASDAQ OTC composite opens at 580.30, up 1.20. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Jason P. Smith. (919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM