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Wachovia Corp. today announced that its General Bank segment, which includes credit and debit cards, mortgages and other products for consumers and businesses, earned $1.1 billion during the second quarter ended June 30, down 27% from $1.5 billion during the same period last year. The bank blamed the lower earnings on rising credit costs and related expenses, especially in its mortgage business. Wachovia reported $1 billion in fee and other income during the second quarter, up 7% from $935 million. The bank attributed the increase partly to higher interchange income from a 14% increase in credit and debit card volume compared with the second quarter of 2007. Wachovia did not release specific transaction data. Companywide, Wachovia reported a net loss of $8.7 billion compared with net income of $2.3 billion during the second quarter last year. The company also announced plans to cut 6,350 jobs, about 5% of its work force. During a conference call with analysts, Donald Truslow, Wachovia's head of risk management, said most of the bank's losses were tied to turmoil in the housing market. "Credit metrics showed pretty meaningful deterioration throughout the quarter, primarily driven by the continued decline in the housing market," Truslow said. "We continue to confront unprecedented housing-price declines in the market." Net charge-offs of consumer loans during the quarter totaled $933 million, up 418% from $180 million during the same period last year. Revolving consumer loans during the quarter averaged $1.8 billion, down 42% from $3.1 billion.

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