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While Insee provides a rise in the unemployment rate of 7More issue of expansion to everything goesAs the benefits go far beyond the fundingProbably more than the situation warrantsIt is now the practitioners take the penIts truth is to search for the fountain in Molière4 of the population in France is unlikelywithout s adventure throughout the 1990sAfter more than a year of twists and turnsIs here typically used the concept of heart of activityWho says better Wachovia broke all records of quarterly losses since the beginning of the crisis of the "subprime". The Bank has published yesterday a net loss of $ 23.9 billion and income fell by 30, 5.7 billion for the third quarter of 2008. The Bank of Charlotte, North Carolina, is in the unenviable position of being the first of the institutions in the world in terms of losses and write-downs of assets since the beginning of the "sub-prime" crisis, with nearly a hundred of billions of dollars in assets, according to the Bloomberg Agency.
"Unprecedented events almost unimaginable for the third quarter and the considerations surrounding the current merger with Wells Fargo have created a scenario that has led to a depreciation of goodwill in our activity of retail banking and small business," explained David Zweiner, Chief Financial Officer of Wachovia Bank.
The loss of the third quarter breaks down into several elements, the most important being a depreciation of 18.8 billion in amortization of goodwill (goodwill) due to a rapid deterioration of its assets.
Tax cuts
It was necessary to take into account losses of $ 737 million incurred by its asset management activity, Evergreen, and the cost of the transaction to put an end to prosecution of the State of New York against several banks on the sale of ARS ("auction-rate securities"), which was established at $ 497 million. The Bank also should cover 4.8 billion to cover losses resulting from the unfortunate redemption of the Californian claimant of Golden West Financial loans in 2006, which left him on the arm a dangerous loan portfolio variable rate of $ 118.7 billion. Finally, she had to register $ 2.5 billion of losses due to the volatility of financial markets. "Without depreciation of 18.7 billion after taxes and merger-related restructuring costs, the net loss came to $ 4.76 billion", said the release.
"The results of the third quarter of Wachovia are in line with our expectations," said John Stumpf, President and CEO of Wells Fargo. "We are more encouraged than ever by what we have seen their franchise." For its part, the Financial Director of the California bank appreciates "the prudence of Wachovia, which leaves its losses behind it." In fact, "Wells Fargo obtain substantial tax cuts because of the losses incurred by Wachovia." Therefore, there is more loss, more they are happy. "It's like a free ticket," said Chris Marinac, the Executive Director of FIG Partners LLC, Bloomberg.
After a somewhat bizarre episode, Wachovia shareholders have chosen to merge with Wells Fargo as a letter of intent was signed with Citi. The latter eventually abandon the transaction but intends to pursue Wachovia for breach of contract. Wells Fargo will pay the Bank $ 14 billion and enjoys no support from the public authorities for the debts.
The transaction should be concluded in the fourth quarter of 2008. The new set will have 1,400 billion of assets and $ 787 billion of deposits and will handle a network of 6,000 agencies in 39 States. Wells Fargo intends to raise 20 billion to offset the loss of his future acquisition as well as to reduce its annual expenditure of $ 5 billion.
