New Wachovia CEO Robert Steel moved aggressively to staunch the bank's losses by taking a massive $8.9-billion hit in the second quarter and slashing its dividend to almost nothing, the New York Times reports. Steel had every reason to clean house, but analysts had predicted only a 78 cents-per-share loss. Instead, after $6.1 billion in writedowns, Wachovia lost $4.20 a share.
Wachovia sustained staggering losses from its acquisition of California mortgage lender Golden West Financial, the Times notes, posting dismal results even as other big banks are beating second-quarter forecasts. “These bottom-line results are disappointing and unacceptable," said Wachovia’s chairman. "While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility.”