Sovereign Bancorp to take $1.58 billion write-down

Source: Exec Digital USA

Date :14/01/2008 06:20:33

Continued volatility in the financial markets and deterioration in the credit environment expected to impact Sovereign Bancorp’s financial results; expect to take $1.58 billion write-down.

Sovereign Bancorp., parent company of Sovereign Bank, said the charges in the fourth quarter 2007 will include $1.4 billion caused by goodwill impairments and a pre-tax, non-cash charge of $180 million related to impairment of mortgage financers Fannie Mae and Freddie Mac.

Joseph P. Campanelli, President and Chief Executive Officer of Sovereign said that Sovereign is a ‘fundamentally sound financial institution’ and that forecasts indicate that it can maintain this designation even under a further worsening of industry conditions.

Credit losses

The charges also include a $738 million provision for credit losses for loan and lease losses, up from $650 million in the prior quarter.

It will also set aside about $27 million related to financings Sovereign provided to two mortgage companies that have defaulted on certain agreements.

Sovereign will release its fourth quarter 2007 earnings on January 23, 2008.

January 14, 2008