Only 13 percent of banks on watch list fail: FDIC's Bair

WASHINGTON (Reuters) - About 13 percent of banks placed on a regulatory watch list historically have failed, the head of the U.S. Federal Deposit Insurance Corp said on Monday.

The agency has a running tally of problem banks that its examiners closely monitor. At the end of the first quarter, 90 institutions were on the list that is expected to be updated next month.

"Actually, only 13 percent of the institutions that go on the troubled bank list eventually fail," FDIC Chairman Sheila Bair said in an interview on the PBS program "NewsHour with Jim Lehrer."

"We work with the primary regulator to give them extra care and attention, to nurse them back to health or to sell them off to another institution," said Bair.

So far this year seven banks have failed, including IndyMac Bancorp Inc IDMC.PK, which became the third largest U.S bank failure and was on the FDIC watch list in the second quarter.

Bair said she would be surprised if she saw another bank failure like IndyMac, or larger.

The FDIC oversees an industry-funded reserve of about $53 billion used to insure up to $100,000 per deposit and $250,000 per individual retirement account at insured banks.

(Reporting by John Poirier; Editing by Tim Dobbyn)