The Charlotte, N.C., bank made $1.69 billion, or 89 cents a share, for the quarter ended Sept. 30, down from the year-ago $1.88 billion, or $1.17 a share. Excluding restructuring costs, earnings fell to 90 cents in the latest quarter from $1.19 a year ago. Analysts surveyed by Thomson Financial were looking for $1.03.
The bank took a $1.3 billion hit on what it called "valuation losses" tied to capital markets unrest.
"While the impact of the market disruption was significant, it's worth noting that the majority of the lower market valuations in the third quarter largely arose from a repricing of risk in the marketplace and do not reflect deterioration in the underlying credit quality of the assets in our leveraged finance and commercial real estate securitization businesses," CEO Ken Thompson said. "Looking ahead, we're taking the appropriate steps to ensure that as markets remain unsettled, we focus intently on actively managing our exposures and controlling costs."
The news comes at the end of a week in which
Bank of America
reported results that were hit hard by the decline of the housing market and the credit crunch, which was sparked by investor flight from souring subprime securities. Among the nation's biggest banks, only
reported numbers that impressed investors.
Wachovia said it recorded a provision for credit losses of $408 million, reflecting modest deterioration in credit quality, a more uncertain credit environment and loan growth. Net charge-offs were $206 million, or an annualized 0.19% of average net loans.