US sees biggest bank failure of '09; 77 collapses in 8 months | india | Hindustan Times
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US sees biggest bank failure of '09; 77 collapses in 8 months

india Updated: Aug 16, 2009 18:14 IST
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The US has seen the biggest bank failure of 2009 with Colonial Bank, which had assets worth USD 25 billion as on June 30, closing operations last week after hit by financial turmoil.

In just eight months this year, 77 banks have gone out of business against 25 bank failures last year.

The authorities on August 14 closed down five banks -- Colonial Bank; Dwelling House Savings and Loan Association; Union Bank, National Association; Community Bank of Arizona and Community Bank of Nevada.

As per the Federal Deposit Insurance Corporation (FDIC), which is often appointed as the caretaker of failed entities, the collapse of these five banks would cost the agency a staggering USD 3.68 billion.

The failure of Colonial Bank would cost the regulator as much as USD 2.8 billion. The entity has 346 branches in Alabama, Florida, Georgia, Nevada and Texas.

"As of June 30, 2009, Colonial Bank had total assets of USD 25 billion and total deposits of approximately USD 20 billion. BB&T will purchase approximately USD 22 billion in assets of Colonial Bank," FDIC said in a statement.

The collapse of Community Bank of Nevada would result in an expense of USD 781.5 million for FDIC.

Last year, US saw the failure of Washington Mutual which then had assets to the tune of USD 307 billion.