Bad day for Wachovia, Regions
Wednesday, July 23, 2008RUSSELL HUBBARDNews staff writer
Tuesday was as bad a day in Birmingham banking history as the most seasoned of the city's top bankers can remember.
Wachovia Corp., which bought Birmingham's SouthTrust Corp., reported a staggering $8.9 billion second-quarter loss. Regions Financial Corp., the largest Alabama-based bank, saw its profits plunge by half.
"I have been in it 39 years and this is as bad as I have seen," Regions Chief Executive Dowd Ritter said of the conditions facing large regional banks such as his.
The news exploded off of the Wall Street tickers Tuesday, as the sun rose over the corner of Fifth Avenue and 20th Street North downtown, where the office towers occupied by Regions and Charlotte-based Wachovia stare at each other over one of downtown's busiest intersections:
At 6 a.m., Regions reported its second-quarter profit dropped by 54 percent, and cuts its dividend by 74 percent, setting aside additional reserves of $300 million to cover bad loans.
Less than a minute later, Wachovia, based in Charlotte, reported its massive loss and announced plans to cut 6,350 jobs and leave another 4,400 positions unfilled. That includes an undisclosed number in Birmingham, where the fourth-largest bank in the country has about 1,500 employees and thousands of shareholders from the SouthTrust days.
At noon, a U.S. government agency reported that U.S. home prices fell 4.8 percent in May, dealing yet another blow to banks saddled with selling hundreds of thousands of homes repossessed from broke borrowers.
Real estate was the key Tuesday.
Mortgage holders and home-construction companies nationwide have been packing up and turning in their keys to their lenders in record numbers.
From 2001 through 2005, banks including Regions and Wachovia extended billions in loans to borrowers who never before qualified for credit.
Shelly?! Batter up!
Wednesday, July 23, 2008RUSSELL HUBBARDNews staff writer
Tuesday was as bad a day in Birmingham banking history as the most seasoned of the city's top bankers can remember.
Wachovia Corp., which bought Birmingham's SouthTrust Corp., reported a staggering $8.9 billion second-quarter loss. Regions Financial Corp., the largest Alabama-based bank, saw its profits plunge by half.
"I have been in it 39 years and this is as bad as I have seen," Regions Chief Executive Dowd Ritter said of the conditions facing large regional banks such as his.
The news exploded off of the Wall Street tickers Tuesday, as the sun rose over the corner of Fifth Avenue and 20th Street North downtown, where the office towers occupied by Regions and Charlotte-based Wachovia stare at each other over one of downtown's busiest intersections:
At 6 a.m., Regions reported its second-quarter profit dropped by 54 percent, and cuts its dividend by 74 percent, setting aside additional reserves of $300 million to cover bad loans.
Less than a minute later, Wachovia, based in Charlotte, reported its massive loss and announced plans to cut 6,350 jobs and leave another 4,400 positions unfilled. That includes an undisclosed number in Birmingham, where the fourth-largest bank in the country has about 1,500 employees and thousands of shareholders from the SouthTrust days.
At noon, a U.S. government agency reported that U.S. home prices fell 4.8 percent in May, dealing yet another blow to banks saddled with selling hundreds of thousands of homes repossessed from broke borrowers.
Real estate was the key Tuesday.
Mortgage holders and home-construction companies nationwide have been packing up and turning in their keys to their lenders in record numbers.
From 2001 through 2005, banks including Regions and Wachovia extended billions in loans to borrowers who never before qualified for credit.
Shelly?! Batter up!
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