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Injin

Wachovia Has Record $8.9 Billion Loss, Cuts Dividend

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July 22 (Bloomberg) -- Wachovia Corp., the U.S. bank that hired Treasury Undersecretary Robert Steel as chief executive officer two weeks ago, reported a record quarterly loss of $8.9 billion, slashed the dividend and announced 6,350 job cuts. The stock fell as much as 12 percent in early New York trading.

The second-quarter loss of $4.20 a share compared with net income of $2.3 billion, or $1.23, a year earlier, the Charlotte, North Carolina-based company said today in a statement. The loss included a $6.1 billion charge tied to declining asset values.

The writedown, job cuts and second dividend reduction in three months reflect Steel's response to the worst housing market since the Great Depression, which cost former CEO Kennedy Thompson his job after eight years. Wachovia has dropped more than 75 percent in New York Stock Exchange composite trading since it spent $24 billion two years ago to buy Golden West Financial Corp. just as home prices were peaking.

``This is Steel's chance as the new guy to set the bar low so that he can increase the dividend going forward if their performance improves,'' said David Dietze, president and chief investment strategist at Point View Financial Services in Summit, New Jersey, which owns Wachovia shares.

Wachovia shares have declined 65 percent this year, the second-worst performance on the 24-company KBW Bank Index behind National City Corp., Ohio's largest bank. The stock fell to $12.36 at 9 a.m. in New York. The cost of protecting the bank's debt rose 10 basis points to 315, according to broker Phoenix Partners Group. Fitch Ratings cut Wachovia one level to A+ from AA-, citing its mortgage business.

Job Cuts

Wachovia lowered the dividend to 5 cents a share from 37.5 cents and will leave 4,440 positions open, according to a presentation to analysts today. Steel, 56, also said the company is moving to ``sell selected non-core assets'' and reduce the number of business customers who only use the bank for loans rather than other services. Wachovia expects to cut expenses during the second half of this year by $490 million and then reduce 2009 spending by $1.5 billion.

The second-quarter loss marks the first time Wachovia has posted consecutive losses in at least 20 years, data compiled by Bloomberg show. Wachovia's report follows the release of better- than-estimated quarterly results at JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co.

``The entire organization is focused on protecting, preserving and generating capital, reinforcing Wachovia's strong liquidity position and reducing risk,'' Steel said in the statement.

The whole financial system is going to collapse. All of it. When it does, it's going to change absolutely everything.

Fun, fun.

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Sacking 6,350 people I bet the quality of service will suck when you start trying to take out your money..

Wachovia has dropped more than 75 percent in New York Stock Exchange composite trading since it spent $24 billion two years ago to buy Golden West Financial Corp. just as home prices were peaking.

They must have good economists in this bank buying at the peak.

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Sacking 6,350 people I bet the quality of service will suck when you start trying to take out your money..

They must have good economists in this bank buying at the peak.

Bonuses probably not high enough, can't expect them to do their jobs properly for only a couple of mil.

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The whole financial system is going to collapse. All of it. When it does, it's going to change absolutely everything.

Your first two sentences may be correct. The third is wishful thinking. Nothing is going to change. :)

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Your first two sentences may be correct. The third is wishful thinking. Nothing is going to change. :)

:lol:

Bet you half a dollar?

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:lol:

Bet you half a dollar?

I'll raise you two rolls of toilet paper, 1 cigarette and 3 potatoes (the only currencies remaining, perhaps?) :)

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I'll raise you two rolls of toilet paper, 1 cigarette and 3 potatoes (the only currencies remaining, perhaps?) :)

Oh there'll be some new currency or other I have no doubt.

This is the sort of once in three generations event usually sees the current elite hung from lamposts and some kind of scuffling war though.

Fun, fun.

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Guest Winnie
Oh there'll be some new currency or other I have no doubt.

This is the sort of once in three generations event usually sees the current elite hung from lamposts and some kind of scuffling war though.

Fun, fun.

Injin - in your view, why does Wall Street seem to rally on these shocking quarterlies from banks? One bright spark on tickerforum said it was because they (in cahoots with Paulson etc) pitched their likely writedowns so that they would beat expectations - so even when the losses are dreadful, they are "not as bad as expected". Surely, as you say this is all going to get rumbled - I have rarely seen such emperor's new clothes as the financials rally of the last few days...............................................

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Injin - in your view, why does Wall Street seem to rally on these shocking quarterlies from banks? One bright spark on tickerforum said it was because they (in cahoots with Paulson etc) pitched their likely writedowns so that they would beat expectations - so even when the losses are dreadful, they are "not as bad as expected". Surely, as you say this is all going to get rumbled - I have rarely seen such emperor's new clothes as the financials rally of the last few days...............................................

What else are you going to do with dollars?

Buy gold?

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Guest Winnie
What else are you going to do with dollars?

Buy gold?

:lol::lol::lol:

so true.........................

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Injin - in your view, why does Wall Street seem to rally on these shocking quarterlies from banks? One bright spark on tickerforum said it was because they (in cahoots with Paulson etc) pitched their likely writedowns so that they would beat expectations - so even when the losses are dreadful, they are "not as bad as expected". Surely, as you say this is all going to get rumbled - I have rarely seen such emperor's new clothes as the financials rally of the last few days...............................................

The chap sounds like a bright spark. This is revolutionary thinking

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Wachovia? Isn't he the writer of The Matrix who is reportedly undergoing some kind of gender sexual stuff at the moment?

Could explain a lot.

Will Injins be heavily in demand in the new order?

We've had the cowboys in charge and look what a mess they've made.

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  • 401 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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