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The embattled bank will see two top finance folks leave once successors are named.
Stephen Taub, CFO.com | US
August 1, 2008
The wave of top-management departures at Wachovia continues with the announced retirement of a senior finance executive. The struggling banking giant says its chief risk officer, Donald Truslow, plans to retire once a successor is named. The company has launched a search for his successor.
Truslow, who joined Wachovia in 1980, served as treasurer and comptroller before becoming CRO in 2000. Over the years, he has held a number of positions in finance, risk management, and corporate banking.
Last week CFO Thomas Wurtz said he plans to leave the embattled bank after a successor is named.
Last month Wachovia brought in Robert Steel, who had served as undersecretary for domestic finance at the U.S. Department of Treasury, as president and chief executive officer of the company.
Also last week, Wachovia reported an $8.9 billion second-quarter loss, including a $6.1 billion noncash goodwill impairment charge in what it called commercial-related subsegments. The giant deficit stunned observers, who had hoped for a gentler slope to the big bank's earnings slide.
Wachovia contended the goodwill write-off reflected declining market valuations and asset values. It stated that the charge has no impact on Wachovia's tangible capital levels, regulatory capital ratios, or liquidity. Wachovia also said it had added $5.6 billion to its loan loss reserve to cover net charge-offs and increase the reserve by $4.2 billion.
In an effort to preserve cash, the bank also slashed its quarterly dividend to 5 cents a share from 37.5 cents, noting that the move will conserve about $700 million of capital per quarter. In April Wachovia pared its dividend 41 percent.
Much of Wachovia's problem stems from its 2006 acquisition of Golden West Financial Corp. for about $25 billion at the top of the real estate boom. Golden West was known for underwriting some of the most "creative" mortgage loans, including the so-called Pick-A-Payment loan option. Under that program, which Wachovia recently halted, borrowers could choose to make a partial interest payment on all new home loans.