Non-performing loans on the rise

Northwestern Financial Review, Jul 15, 2001

Non-performing loans at the nation's banks surged by 26.6 percent during 2000, according to Weiss Ratings Inc., a bank-rating agency. The increase is dramatic in light of the modest 2.9 percent increase in non-performers reported in 1999 and declines in 1995, 1996 and 1997. For the first time in several years, problem real estate loans rose as well.

At the end of 2000, U.S. banks carried $48.8 billion of non-performing loans, up from $38.6 billion at the end of 1999. Residential and commercial non-performers increased last year, reversing a trend. For several years, real estate lending problems had been on the decline. More than $18 billion of the non-performing loans were mortgage related, secured by residential or commercial real estate.