At the same time, $70.7 million was set aside in the reserve for future loan losses.

The company took a $130 million provision for expected loan losses.

The change will most likely force the banks to increase their reserves to cover loan losses.

Interest rates have come down again and loan losses are expected to improve.

But he said that total earnings before loan losses and taxes in 1991 were $7.5 billion.

Therefore, these banks may recognize other loan losses at this time.

The more capital a bank has, the better it can withstand loan losses.

Chemical will increase its reserve for possible loan losses by $1.1 billion.

Besides its loan losses, another big challenge at the bank has been to cut costs.

"Now they will have a higher interest margin to cover the loan losses," he said.