Wachovia plunges to $8.9bn loss
Source: FT.com
Wachovia, the fourth largest US bank, plunged to an $8.9bn loss in its second quarter , cut its dividend for the second time in three months and said it would shed more than 6,000 jobs, only shortly after replacing its chief executive.The loss of $4.11 a share – the largest in the company’s history and the first time in at least twenty years that it has recorded two consecutive quarterly losses – compares with net earnings of $2.34bn or $1.22 a share in the second quarter of 2007.
The results were much worse than the $2.6bn to $2.8bn that Wachovia had said it expected on July 9, excluding goodwill items – the same day it revealed that it had appointed Robert Steel, former US Treasury undersecretary, as chief executive.
“Our balance sheet and liquidity position are strong, and we are committed to keeping them that way,” Mr Steel said in a statement. ”In the short term, the entire organisation is focused on protecting, preserving and generating capital; reinforcing Wachovia’s strong liquidity position; and reducing risk.”
Shares in Wachovia were down 7.9 per cent to $12.14 in pre-market trade. They were already off nearly 75 per cent this year.
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