| Wachovia exec acknowledges bad timing on Golden West purchase
CHARLOTTE -- Wachovia's general bank president on Wednesday highlighted the positives of last year's acquisition of Golden West Financial but acknowledged "our timing was not good" in light of a severe housing downturn. "We continue to feel that this acquisition will prove itself very positive when we get to the other side of the cycle," Ben Jenkins told an audience at the Merrill Lynch banking conference in New York. In his presentation, Jenkins noted that Golden West's branches are helping the Charlotte bank reach a goal of adding 1 million net new checking accounts this year. He also said the bank expects to gain market share in the mortgage business. Wachovia has previously said that it expects to set aside more money than expected in the fourth quarter to protect against problem loans in a weakening housing market.
Finance firm Paragon facing funding crisis
THE UK's third largest buy-to-let mortgage firm yesterday said it was facing funding uncertainties. The update from Paragon – whose costs have soared following the summer credit crunch – alarmed investors as shares in the company tumbled by almost half. The Solihull-based firm said, "The deep turmoil in the credit markets is affecting the normal financing activities of the business." Paragon has no depositors and raises its funding by securitising – bundling up and selling on – its loans. Cash for new lending is also financed by a £2.3bn "warehousing" facility from a banking syndicate. But since the summer credit crisis – sparked by slumping confidence in bonds based on high-risk US mortgages – the securitisation market has effectively closed.
Heard Off the Street: National City at bottom of local heap
One of Wall Street's not-ready-for-subprime players is a likely candidate for this year's worst-performing stock in the PG/Bloomberg index of local stocks. Shares of National City [Ticker: NCC] are off 43 percent this year, closing Friday at $20.86, down $1.69 for the week. Most of the damage to the stock had been done before Oct. 24, when National City reported a 69 percent drop in third-quarter profits, including a $152 million loss from its mortgage banking business. Things may have been a lot worse if the Cleveland-based bank holding company had not sold its First Franklin subprime mortgage business to Merrill Lynch late last year. Included in the transaction were about $5.6 billion in First Franklin mortgages National City was holding in its loan portfolio.
Syndicate Bank extends online facility for loans
CHENNAI: Syndicate Bank has announced the launch of online request for three more loan products such as housing loans, loans for professional and self employed and traders for above Rs. 2 lakhs. According to a release, the facility enables the applicants to access and submit their requests for loan online through bank's website. — Corporate Reporter Printer friendly page
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Local lenders' business loans going bad
Bad loan writeoffs are surging at Chicago banks, a sign that housing market troubles are spreading to small and mid-sized businesses. The area's second- and third-largest banks LaSalle Bank N.A. (now owned by Bank of America Corp.) and Harris N.A. wrote off business loans through Sept. 30 at more than twice the rate of last year, according to financial statements. As a group, the 15 largest local banks that disclose Chicago-specific data wrote off $84.3 million in business loans, about double the figure for the first three quarters of 2006. Although loans to commercial real estate developers took a turn for the worse early this year, lending to other businesses has been seen as safe. The writeoffs haven't reached levels that dent banks' earnings, but many bankers expect credit quality to further deteriorate this year and well into 2008 as the economy continues to soften.
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