Wachovia may have lost $8.9 billion in the second quarter, but it gained a true believer in July: Newly minted CEO and president Robert K. Steele paid more than $16 million for a million shares of the company on July 22, the same day the dreadful results were released.
The bank is cutting its dividend, abandoning the whole mortgage origination channel and the negative amortization option for Pick-a-Pay, and is proceeding with layoffs of 10,750 staffers begun in June. Wachovia expects to “generate or preserve more than $5 billion of capital” as a result of all the initiatives, Steele noted in the income statement. Meanwhile, CFO Thomas J. Wurtz will leave the bank as soon as a successor is named.
