Stories related to: writedowns

American International Group posted a record-breaking $7.8 billion first-quarter loss yesterday, reports the Wall Street Journal . The insurance giant blamed the poor results on the sagging housing market, the credit crunch and the see-sawing stock market. It announced plans to raise $12.5 billion to patch up the damage to its balance sheet from heavy writedowns. More »

Swiss banking giant UBS will lay off some 10% of its 83,000 workforce and scale back its investment banking arm in an attempt to reassure shareholders that it's taking actions to curtail losses associated with the subprime debacle, reports Bloomberg. Switzerland's largest bank says it will detail a further $11.4 billion in first-quarter writedowns in its earnings report tomorrow—bringing the total to $38 billion over the past three quarters. More »

Credit Suisse has announced it lost a mammoth $2.1 billion in the first quarter, reports the Financial Times. The Swiss banking group, which until recently appeared to have escaped the worst of the credit crunch, continued to post strong earnings from its private banking sector—but that wasn't enough to outweigh writedowns of $5.2 billion. More »

Within Bank of America’s disappointing first-quarter earnings was an unwelcome harbinger for the banking industry, the Wall Street Journal reports. BofA’s results were dragged down by huge additions to its loan-loss provision, an expense many other banks will also record soon. Given current credit conditions, many banks will have to increase their bad-loan reserves, dragging down their earnings. More »

More than $6 billion in subprime writedowns sent Bank of America profits skidding for the third straight quarter today, as the nation's second-largest bank posted a 77% decline in net income for the first quarter. Earnings were $1.21 billion, down from $5.26 billion a year ago, reports Bloomberg. The losses exceeded analysts’ expectations by some 44% and sent market futures into a slide this morning. BofA—in the process of acquiring troubled home lender Countrywide Financial—said revenue slipped 6%. More »

Merrill Lynch today posted nearly $2 billion in losses in the first quarter, after taking another $9 billion in writeoffs, the Wall Street Journal reports. In its third straight quarterly loss, Merrill was in the red $1.96 billion, or $2.19 a share, compared to earning $2.16 billion, or $2.26 a share a year ago. The company said it will cut about 3,000 jobs. More »

Merrill Lynch is likely to report another $6 billion to $8 billion in writedowns related to the subprime collapse tomorrow, leading to a third consecutive quarterly loss, the Wall Street Journal reports. Merrill’s chronic mortgage losses—$30 billion and counting—show just how deep the world's largest brokerage is mired in the mess, and have it slashing costs and jobs. More »

JPMorgan Chase, battling $5.1 billion in subprime writeoffs and deteriorating consumer credit, reported first quarter profits fell 50%, reports the Wall Street Journal. CEO Jamie Dimon warned the outlook for the remainder of 2008 was likely as grim. Morgan—the 3rd-largest US bank—said profits dropped to $2.37 billion, or 68 cents a share, down from $4.79 billion, or $1.34 a year earlier. More »

Investment banks got a brief lift from Wall Street results this week, but surprising reports from Credit Suisse are likely to send their confidence back into the basement, the Financial Times reports. The Swiss firm issued an unexpected first-quarter profits warning yesterday—and said “intentional misconduct” from its own traders was partly to blame. Credit Suisse's shares took a 9% dive following the disclosure. More »

Goldman Sachs today beat analysts' dire predictions even though it reported a 53% drop in first-quarter profits—the worst falloff since 1999—after a $2.1 billion writeoff, reports Bloomberg. Analysts had expected the Wall Street brokerage to see profits drop more than 60%. Goldman said net income was $1.51 billion, down from $3.2 billion a year earlier. More »

Stocks rallied in the afternoon to recover big early losses, buoyed by a prediction from Standard & Poors that the end was in sight for banks' subprime writedowns. The Dow—at one point down more than 230 points—finished up 35.5 points to close at 12,145.74, MarketWatch reports. The Nasdaq gained 19.74 points to end at 2,263.61, and the S&P 500 rose 6.7 points to 1,315.47. More »

Today's after-hours bad news from the credit-crunch front comes from insurer AIG, which reported a fourth-quarter loss of $5.29 billion after taking an $11 billion writedown on mortgage-related insurance contracts, the Wall Street Journal reports. The loss amounts to $2.08 per share; American International Group turned a profit of $1.31 in the fourth quarter of 2006. More »

Sprint Nextel posted a net fourth-quarter loss of $29.45 billion and doesn’t expect a quick recovery, the Wall Street Journal reports. The No. 3 US wireless company will hold off dividend payments and draw down credit lines for protection as more customers leave the service. It has also announced a beefy $100-a-month unlimited plan including voice, web, email, and more. More »

While he’s been called a computer genius, the access Jerome Kerviel obtained to the Société Générale’s systems was probably the result of terrible IT security, writes PC World, not a successful hack of the French bank’s computers. Managing a bank’s passwords is a task often given to the lowest-level IT employee, which Kerviel was before his infamous stint as a futures trader. More »

Bank of America said today its net income plummeted 95% in the fourth quarter, and it wrote down $5.28 billion in collateralized debt obligation. Net income for the largest retail bank and credit-card issuer was $268 million, or 5 cents per share, compared to $5.26 billion, or $1.16 a share, last year. The company had previously estimated write-downs in excess of $3 billion, the Wall Street Journal reports. More »

Analysts expected Bear Stearns to post its first-ever loss today, they just expected it to be smaller. After $1.9 billion in subprime writedowns, the company posted a $6.91 loss per share, dwarfing the $1.82 analysts predicted. Executives gave up their bonuses, as revenue from debt sales and trading were wiped out, Bloomberg reports. “They’ve got a myriad of problems,” one analyst said. More »

Morgan Stanley, the nation's second-largest investment bank, lost $3.59 billion this quarter, its first loss ever, after taking a whopping $9.4 billion in writedowns on mortgage-backed securities. CEO John Mack, who promised to give up his 2007 bonus as penance for the losses, also announced a $5-billion cash infusion from China Investment Corp., the investment arm of the Chinese government, for a stake of 9.9% of the company. More »