Wachovia, the United State’s fourth largest bank, reported nearly a $9 billion loss in the second quarter of 2008, representing a $4.20 loss per share. Excluding a one-time, $6.1 billion charge related to "declining market valuations" (as is commonly done) reduces the loss to $1.27 per share, but this is still behind the $0.78 loss predicted by analysts. The first half of 2008 contained the first back-to-back quarter losses in 20 years for Wachovia, which may make it an attractive purchase for larger companies.

Wachovia’s new CEO, former Treasury undersecretary Steel, has outlined two new measures to return to profitability:

• cut quarterly dividend to 5 cents per share from 37.5 cents
• leave the wholesale mortgage lending business by the end of the week
  The latter of these steps will result in the loss of 6,350 jobs and is accompanied by a $5.6 billion addition to Wachovia’s loan loss reserve. The bank expects home prices to fall another 14%.

Wachovia claims it is still adequately capitalized with a tier 1 ratio of 8%. Other large banks such as Bank of America, Citigroup, JPMorgan and Wells Fargo also reported hefty losses or declines in profit, but were able to beat expectations.