Financial Roundup: Thain Fallout; CapOne Losses; More
More fallout from Thain departure — Bank of America is trying to reassure its workforce, investors and the public that the ouster of former Merrill Lynch CEO John Thain doesn’t mean its takeover of the investment firm is in jeopardy. Thain resigned over concerns that he didn’t tell BofA chief Kenneth Lewis personally about a $15 billion loss last quarter and awarded pre-takeover bonuses to Merrill executives, among other issues. [Source: Charlotte Observer]
CapOne registers loss — Capital One Financial Corp. reported a fourth quarter loss of $1.45 billion. The closely-watched bellwether of credit cards has put aside $2.1 billion for expected card delinquencies. [Source: Associated Press]
Regionals prepare for storm – SunTrust, KeyCorp, Fifth Third Bancorp and BB&T have seen profits decline as they set aside more funds for expected loan losses. Fifth Third, for example, has boosted its loan-loss provision from $1.6 billion in the fourth quarter of 2007 to $2.3 billion in the last year’s fourth quarter. [Source: Wall Street Journal]
Illinois bank fails thanks to Fannie and Freddie — National Bank of Commerce in Berkeley, Ill. has failed because of stock losses following the national takeover of Fannie Mae and Freddie Mac. The firm’s deposits and loans were not issues. [Source: American Banker]
Frank helps home state bank — Barney Frank, head of the House Financial Services Committee and a leading proponent for tougher financial regulation, has admitted that he lobbied the Treasury Department to get OneUnited Bank of Boston federal bailout money. Frank insists that it was a legitimate attempt to help the minority-owned bank. [Source: Boston Globe]
Big run on hedge funds– Hedge fund investors withdrew a record $152 billion in last year’s fourth quarter. Global assets have dropped to $1.4 trillion, the same level as in 2006. [Source: Directorship.com]
Peter Galuszka is a Virginia-based journalist with more than three decades of experience, including 15 years at BusinessWeek, during which he was twice Moscow Bureau Chief and International News Editor in New York.
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