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Banks' Health Questioned as Wachovia Posts $8.9 Billion Loss
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A major question for the bank is how it will make money as it is atoning for its past mistakes, MacLeod said.
In regards to Wachovia's job cuts, spokeswoman Barbara Nate said she expected the effect on the Washington region to be "minimal." The bank has about 1,100 staff members in the area and about 120,000 employees overall.
SunTrust, which has the second most deposits of any commercial bank in the Washington region, had its quarterly profit dwindle 21 percent, to $540 million. The bank has said it does not expect to cut its dividend or raise capital. Its shares rose 16 percent yesterday.
Meanwhile, Washington Mutual, the nation's largest thrift, posted a loss of $3.33 billion. Excluding one-time charges, the bank results equated to a loss of $3.34 a share, while most analysts polled by Thomson Reuters had forecast a loss of $1.04 a share.
During a conference call, executives said their turnaround plan was on track.
"In the face of unprecedented housing and mortgage market conditions, we are continuing to execute on a comprehensive plan designed to ensure that we have strong capital and liquidity, an appropriately sized expense base and a strong, profitable retail franchise," said chief executive Kerry Killinger. "Our recent $7.2 billion capital raise, combined with the other proactive steps we have taken this quarter to strengthen our banking franchise and further expense reductions, continue to move us toward achieving these goals."
Washington Mutual's shares initially rallied on the results, which were released after the regular trading session ended. As of 8 p.m., the stock was down 24 cents after having risen 8 percent in after-hours trading. The stock closed up 6.2 percent, to $5.82, in the regular session.
