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Fourth biggest bank in California taken over by regulators

Updated:2009-11-02 10:34:17

In what was the fourth largest takeover by regulators in the United States this year, the Los Angeles-headquartered California National Bank was acquired by regulators Friday night. However, its business will go on as usual.

The acquisition took place as the 68-branch fourth biggest bank in California suffered from hefty loss in buying preferred shares issued by mortgage giants Fannie Mae and Freddie Mac. It was taken over by the U.S. Bank unit of Minneapolis-based U.S. Bancorp, the Federal Deposit Insurance Corp. said.

U.S. Bancorp, with its assets of 19.4 billion dollars at the end of September, had agreed to assume the deposits and most of the assets of the banks.

This is the latest of a slew of financial problems faced by American banks that have been suffering from the sub-prime crisis. Although the U.S. government has taken over a total of 25 banks in a bid to bail them out, 106 banks have failed so far.

However, the California National Bank's branches, which are mainly based in Los Angeles and Orange counties, will open to business Saturday and next week.

The bank has an asset of 7.8 billion dollars and 6.2 billion dollars in deposits. The failure will not incur losses to depositors, regulators claim.

The new owner of the failing bank, Michael Kelly, said in a letter directed to employees that California National Bank had suffered 855 million dollars in losses.

The other three biggest banks in California are: City National Corp., East West Bancorp and Cathay General Bancorp.

 

 

Source:http://news.xinhuanet.com

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