Withdrawals in April Exceed S&L; Deposits

WASHINGTON — Depositors withdrew $5.4-billion more than they deposited in the nation’s savings and loans in April, the government said Wednesday.

The withdrawals were down from the record rate earlier this year but still high.

Private analysts, meanwhile, predicted further improvements in the next several months now that interest rates have stopped climbing.

The Federal Home Loan Bank Board said net withdrawals in April were off from $8.3 billion in March, $9.2 billion in February and a record $10.8 billion in January.

Still, April marked the 12th straight month that customers withdrew more than they deposited in the nation’s 2,934 S&Ls; and the sixth month in a row of withdrawals in excess of $5 billion.

Withdrawals Slowing

Through the first four months of 1989, customers withdrew $33.7 billion more than they deposited, compared to a $16.2-billion gain during the same period of last year, a time when money was flowing into federally insured accounts following the 1987 stock market crash.

James Barth, the bank board’s chief economist, attributed much of the recent outflow to the failure of thrift institutions to keep pace with rising interest rates offered by competitors such as mutual funds.

For instance, money market mutual funds gained $27.6 billion in assets from January through April, according to the Investment Company Institute. The comparable figure for S&Ls;, which includes interest credited, is a $17.3-billion decline in deposits.

S&L; analyst Bert Ely of Alexandria, Va., said S&L; reports will show slower withdrawals or perhaps even a modest gain in deposits in May or June. Interest rates offered by thrifts historically lag behind money market funds both on the way up and on the way down.

“We have reached the most recent peak in interest rates and now of course they are trending down. We’re seeing a lessening of the rate-driven shrinkage of deposits,” Ely said.

Barth also attributed the shrinkage in April to pressure from regulators on overextended thrift institutions to shrink. About half of the decline can be traced to 10 institutions, four of them insolvent, he said.