Wachovia Bank reports $23.9 billion loss in Q3

October 22, 2008 by · Leave a Comment
Filed under: Industry News 

Another impressive loss from this financial titan.  

Release:

Wachovia Corp reported a third-quarter loss of $23.9 billion on Wednesday, a record quarterly deficit for a banking company in the global credit crisis, underscoring the challenges Wells Fargo & Co faces when it acquires the big lender.

The loss stemmed mostly from an $18.7 billion writedown of goodwill because asset values fell. Wachovia has lost $33 billion in the last two quarters.

“We have weakening in the economy, and loan losses continue to be problematic,” said Gary Townsend, co-founder of Hill-Townsend Capital in Chevy Chase, Maryland. But he said “Wells wants and needs Wachovia” to expand and said the merger will “absolutely” go through under its original terms.

Earlier this month, Wells Fargo agreed to buy Charlotte, North Carolina-based Wachovia for $15.1 billion, without any government backing to cover loan losses it said could reach $74 billion. The value of the all-stock merger had fallen to $14 billion as of Tuesday. A fourth-quarter closing is expected.

The purchase would more than double San Francisco-based Wells Fargo’s size. It would create the nation’s fourth-largest lender, with $1.4 trillion of assets, and biggest retail banking network, with more than 6,600 branches.

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