(12PressRelease.com) Following an FDIC report extending the list of troubled banks to a 17 year high, KTC Capital released an investor warning on shares, mutual funds and derivatives holding U.S. bank stocks.
The latest quarterly survey of the American banking system led the Federal Deposit Insurance Corp. (FDIC) to classify 829 at risk of failing. This is a nearly twofold increase over the 412 banks on the watch list a year ago and is up from 772 in the first quarter of this year.
Banks that find themselves on the watch list are considered the most likely to fail, but few of the lenders on the list actually reach the level of failure. Typically just 13% of banks on the FDIC's problem list have been forced to close by regulators. So far in 2010, 116 banks have failed, with 43 closings during the last three months.
The FDIC also reports that while the number of banks at risk is up, the total assets from this year's failures will probably be lower since banks have been strengthening their balance sheets. They reported a second consecutive increase in the deposit insurance fund, which covers customer deposits when a bank fails. The fund, which had been waning for two years, grew by $5.6 billion. The fund still operates, however, with a deficit of $15.5 billion.
Investment Disclaimer: This release is provided for general information only and nothing contained in the material constitutes a recommendation for the purchase or sale of any security. Although the statements of fact in this release are obtained from sources that KTC Capital Management consider reliable, we do not guarantee their accuracy and any such information may be incomplete or condensed. Also views expressed in this release are based on research materials available from sources considered reliable. Views are subject to change on the basis of additional or new research, new facts or developments. The investment risks described herein are not purported to be exhaustive, any person considering an investment should seek independent advice on the suitability or otherwise of the particular investment. Investment products are not bank deposits or obligations or guaranteed by KTC Capital Management or any of its affiliates or subsidiaries unless specifically stated. Investment products are not insured by government or governmental agencies. Investment and Treasury products are subject to Investment risk, including possible loss of principal amount invested. Past performance is not indicative of future results: prices can go up or down. Investors investing in investments and/or treasury products denominated in foreign (non-local) currency should be aware of the risk of exchange rate fluctuations that may cause loss of principal when foreign currency is converted to the investors‘ home currency. Investment and treasury products are not available to U.S. persons. All applications for investments and treasury products are subject to Terms and Conditions of the individual investment and Treasury products. Customer understands that it is his/her responsibility to seek legal and/or tax advice regarding the legal and tax consequences of his/her investment transactions. If customer changes residence, citizenship, nationality, or place of work, it is his/her responsibility to understand how his/her investment transactions are affected by such change and comply with all applicable laws and regulations as and when such becomes applicable. Customer understands that KTC Capital Management does not provide legal and/or tax advice and are not responsible for advising him/her on the laws pertaining to his/her transaction.