Bank One Warns of Spike in Bad Loans

Bank One (ONE Quote) sounded the alarm on bad loans yet again, warning of sharply rising credit losses in coming quarters.

In its annual regulatory filing, made Tuesday, the Chicago-based bank said it expects commercial credit losses for the next several quarters "will at least double" the typical level of recent years, which has been around 0.40% of loans.

"The main part of the 10-K is that they expect credit quality to get worse for several quarters," says Mike Mayo, banks analyst at Prudential. "A lot of people have expected they would get bad for two more quarters in the industry and then it would plateau. Well, here's one major bank saying several quarters," says Mayo. (He rates Bank One a sell.) ...