Archive for the ‘Citi’ tag
Citi Buys Wachovia’s Banking Business
On Monday, Citigroup agreed to purchase the banking operations of Wachovia for $2.1 billion. Citigroup will now have more than 4300 US branches and $600 billion in deposits - putting it with the two other large banking giants Bank of America and JPMorgan Chase (who took over Washington Mutual recently). In the deal, Citigroup will be assuming $53 billion worth of debt and absorb up to $42 billion of losses from Wachovia’s $312 billion loan portfolio with the FDIC covering any remaining losses.
Citigroup to buy Wachovia banking operations [Associated Press]
Wachovia Fail? In Talks With Citigroup & Wells Fargo
After the mostly overlooked yet spectacular collapse of Washington Mutual (its shareholders certainly knew she tanked), it appears Wachovia, which was similarly capitalized, is on the trading block with two potential partners. Reportedly Citigroup Inc. and Wells Fargo & Co. are bidding to take over Wachovia with Spain’s Banco Santander SA (according to the Wall Street Journal anyway) as a possible third bidder in the process.
Wachovia’s stock price fell 27% on Friday and then another 15% in after hours trading.
Wachovia’s current problems stem largely from its acquisition of mortgage lender Golden West Financial Corp. in 2006 for roughly $25 billion at the height of the nation’s housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West’s specialty, which let borrowers skip some payments
But like many other banks, Wachovia stands to benefit from the passage of the government’s proposed $700 billion rescue plan — the details of which were emerging from Washington on Sunday.