US bank closures were at a record high 144 banks in 2009 full year and the year 2010 has also started on a weak note. The US banking regulator has confirmed the closure of another four banks last week, which takes the cumulate year to date 2010 total to 41 banks.
The US regulator report in the month of November 2009 indicated over 400 banks with weak solvency funding. All that is expected to result in further bank failures in the months to come. As per experts there could be at least 120 bank closures this year in US primarily on the back of real estate losses. Most of the US banks have lent huge money to commercial real estate sector during 2006 and 2007 most of which are turning out to be bad. The provisioning spike is forcing many of the smaller US banks to go for closure. The US banking regulator is consciously working on closing down all the weak US banks as a clean up measure.
Given the weak commercial real estate sector as on date, no respite seems to be in the corner for the weak banks.