Wachovia announces loss and job cuts

Source: Exec Digital USA

Date :7/23/2008 4:19:53 AM

America’s fourth-largest bank records US$8.9 billion Q2 loss and said it would shed more than 6,000 jobs

America’s banking industry continued its rollercoaster ride yesterday, July 22, as Wachovia announced a record loss for its second quarter, cut its dividend for the second time in three months and announced plans to axe thousands of jobs.

The loss of US$4.11 a share is much worse than it had expected.

Lanty Smith, Wachovia’s chairman, said: “These bottom-line results are disappointing and unacceptable. While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility.”

The results provide further evidence that the credit crunch is far from over. Stronger than expected results from Wells Fargo, Citigroup, Bank of America and JPMorgan Chase in recent days had outweighed a disappointing loss at Merrill Lynch.

However, fears began to resurface this week as American Express reported a 38 percent fall in Q2 profits and issued a profit warning for the year.