BankUnited will fail

September 12, 2008

It’s always better to provide evidence when arguing against the financial health of an institution with employees and depositors. Unfortunately, BankUnited is almost in default already, and the numbers don’t require much elaboration.

 

Percent

June 30, 2008

March 31, 2007

Earnings coverage of net loan chargeoffs

0.23

79.04

Loss allowance to noncurrent loans

23.43

56.79

Net chargeoffs to loans

2.56

0.02

 

The loss allowance of BankUnited at 23 percent is much worse than that of Florida average, which is one of the worst in all US. This number should be more than 100 percent in an average bank. What this implies is that BankUnited does not have enough funds to cover its losses, and with funding conditions getting tighter by the day, and capital injections more and more difficult, it is only a matter of time before BankUnited is dead. Let me emphasise, this bank should have been closed down a long time ago; that it’s still operating is nothing short of incredible.

 

More on the unhealth of the banking industry can be found here.

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6 Responses to “BankUnited will fail”

  1. […] to fail at some point. The numbers that document the bankrupt situation of BankUnited are here. Of course it’s certain that there are more banks than these that will […]

  2. REY SANTOS said

    One can make an assumption based on financials alone. But the raw numbers don’t tell the whole story. BankUnited has been taken steps to make sure they have a sound recovery from the “banking and mortgage crisis”. Long before the politicians and financial “pundits” were talking about how to resolve the financial crisis facing many homeowners as a result of their “subprime” and “option arm” mortgages, BankUnited was taking steps to work with their clients and modify the many option arm mortgages it originated. BankUnited was not involved with subprime mortgages at all. BankUnited has taken the very tough, but necessary steps to reduce costs by eliminating its wholesale mortgage division, reduction in staff levels, voluntarily modifying all of its option arm mortgages, scrutinizing every detail of all newly originated mortgages, and scrutinizing all of the loans originated by BankUnited’s wholesale and retail brokers. These are only a few of the steps that BankUnited has taken to make sure they continue to serve all of their clients. BankUnited is in it for the long haul and if the “financial pundits” would spend some time to find out what BankUnited is doing, they may just change their tune from “gloom and doom” to “the comeback kid”.

  3. wishful thinking said

    to the points above (regarding BankUnited proactively correcting their past errors), BankUnited has still been issuing loans that no other bank in South Florida would be writing. please wake up and smell the Friday afternoon visit coming soon.

  4. moneymill said

    The nature of the arguments of “Rey Santos” are so obviously fallacious, I thought it would be fine to leave them without a response. He certainly sounds like an employee of BankUnited. I believe this bank will be closed soon. Time will tell.

  5. Art S. said

    I was a customer of BankUnited. I called them and called them numerative times over an 18 month period regarding information about my farse of a loan from them, and all I ever got was the runaround and excuses, with arrogance, so finally, I had to hire an attorney to help try to get answers my questions. And astonishing answers I got! So NOW they have decided to help their customers? A little late I’d say, as a matter of course, wouldn’t anybody say?
    Art

  6. […] insisted that the bank would be closed in two separate articles here and here, both of them in September 2008. Needless to say, there are many more such banks in this great […]

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