Updated from 9:59 a.m. EDT.
Robert Steel,
Wachovia's (WB Quote - Cramer on WB - Stock Picks) new CEO, seems to have no qualms about diving head first into the mortgage-troubled bank's problems and assuaging investors that it would not have to raise additional outside capital.
Shares of the beleaguered Charlotte, N.C., bank were rising 7.4% Tuesday afternoon to $14.15, after Steel -- who
joined the bank a little more than two weeks ago after serving as undersecretary of the Treasury -- said a common stock issuance was "not on the plan."
"We're raising lots of capital by reducing the dividend, managing our expenses and running our businesses better and that's the plan for now," Steel said on a conference call with analysts Tuesday morning.
Shares had been plunging more than 9% Tuesday morning after the troubled bank posted an $8.9 billion, or $4.20 a share, second-quarter loss and slashed its dividend by 86% to 5 cents a share. The bank also cut 10,750 positions and said it has decided to exit the wholesale mortgage origination channel, among other things.
Things turned around for the stock after Steel said the company has "taken what we believe are some really clear and instantly measurable steps," in deciding to cut the dividend and outlining plans that "that we believe will give us a substantial improvement in our capital ratios."
"We have other levers should those not be enough, but I think you can hopefully hear the determination to work through this situation and -- to the very best of our ability -- be thinking about what's best for our shareholders," he added.
Laurie Kulikowski
RSS
