Subprime Mess Hits Wachovia
The company increases its loan-loss allowance.
Shares of
Wachovia
(WB) - Get Weibo Corporation Report
fell 4% early Friday after the Charlotte-based bank said the downturn in subprime mortgages would require it to record an added $1.1 billion pretax writedown for October.
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Wachovia also plans to increase its fourth-quarter allowance for loan losses by $500 million to $600 million because of the weakenss in the housing market.
After the company announced its third-quarter results, "certain financial markets experienced further deterioration, particularly the markets for subprime residential mortgage-backed securities and for collateralized debt obligations collateralized by
residential mortgage-backed securities," Wachovia said.
Shares were down $1.56 at $38.74.
