It's another bleak day for bank earnings. Wachovia Corp.
reported a second-quarter net loss of $8.9 billion. It took a hit of $6.1 billion alone for write-downs for bad investments related to the mortgage and credit crises. Wachovia's loss also was due to the A.G. Edwards acquisition last June, according to a press release.
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"These bottom-line results are disappointing and unacceptable," said Lanty L. Smith, Wachovia's chairman, who served as interim chief executive officer before CEO Robert Steel was hired earlier in the month.
In April, when the bank announced a $393 million first-quarter loss, it announced plans to raise $7 billion, and to slash its dividend by 41 cents.
In order to create more capital, Wachovia is restructuring, downsizing and has hired Goldman Sachs Group Inc. to advise it on options for its loan portfolio. Wachovia is also selecting noncore assets to possibly sell including some Wichita, Kan., branches, according to The Wichita Eagle.
Some of Wachovia's troubles started with the acquisition of Golden West Financial Corp. For a full timeline of Wachovia's fall from grace check out Carolyn Murphy's Dealwatch. - Maria Woehr
