Wachovia ends financials winning streak
Wachovia shocked the markets today, in a bad way, posting a net loss of $8.86 billion, approximately $4.20 per share. This is a huge reversal of fortunes for the nation’s fourth largest bank, which in the same period last year earned $1.22 per share.
Wachovia reported $6.21 billion in write-downs and boosted its provision for loan losses by over $5 billion. Yesterday, the bank announced plans to completely exit the wholesale mortgage business.
The bank slashed its dividend by 87 percent and will trim its workforce by laying off 6,350 employees. The company will also eliminate over 4,000 positions which are currently open or held by contractors. The cost cuts are expected to save the bank $1.5 billion in 2009.
The series of good surprises (prior to Wachovia) led some to believe that the financials had turned the corner, have they really?
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