Wachovia announces second quarter loss

23 July 2008

Troubled US bank Wachovia has declared a bigger-than-expected second-quarter loss of $8.9 billion, as the credit crunch continues to take its toll.

Wachovia also announced that 6,350 jobs would be lost at the bank, and that shareholders' dividends would be reduced by 87 per cent.

In addition, a further 4,400 staff vacancies would also remain unfilled, in a cost-cutting measure.

In a week in which firms such of Bank of America have announced second-quarter profits, Lanty Smith, the chairman of Wachovia, said that the bank would not be blaming the credit crunch alone for its poor performance.

"These bottom-line results are disappointing and unacceptable," he said.

"While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility."

The bank's new chief executive, Robert Steel, added: "Our reported results today are clearly a disappointing performance for which we take responsibility…we are serious about getting on top of these issues quickly, and we believe we have a good grasp of the challenges facing the economy, the industry and Wachovia."

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