Wachovia evil times due to bad timing by Lenka Filipova

According to the reports of Wachovia, which is the fourth largest bank in USA, it is seen that it did very bad as its loss is $393 million in the first quarter. What is more, to reach the balance again it was forced to look for the support of $7 billion in cash as well as to reduce its dividends. And this whole situation is attributed to bad timing.As an analyst with Gradient Analytics Inc. in Scottsdale, Donn Vickrey, explained, such act of injection to help the bank to fortify itself is not a surprising at all. Actually, such behavior is expected in smaller banks as well as in the bigger once. Chief Executive Ken Thompson said to analysts that as a result of such loss the bank is about to make 500 people redundant. He felt pretty disappointed and he is really aware of the fact that these actions bring together with themselves unwanted costs. It was reported that the shares slumped to $25.55 by 8.1 per cent on Monday. Well, the overall crisis emerged when Wachovia took over the Golden West Financial Corp. with its foundry in California in 2006. The deal was for $25 billion and as Thompson admitted the timing had not been the best. Thus he wrote the letter to the shareholders explaining the situation with the words of regret. He confessed that the acquisition was not good for the mortgage industry and that the timing was poor. However, he added his perspective for this particular market in the future where Wachovia will definitely play its role.

by Lenka Filipova for PocketNews (http://pocketnews.tv)

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Edited by: Maria Zitnanska