Wachovia Corp.'s third-quarter net income dropped 10% as loan-loss provisions quadrupled and the company recorded $1.3 billion in losses and write-downs. Wachovia also signaled increasing credit troubles ahead.
Loan-loss provisions surged to $408 million from $108 million amid growth in auto, commercial and consumer real estate lending. Net charge-offs were 0.19% of average net loans, compared with 0.16% a year earlier. Nonperforming assets, troubled loans that could turn into charge-offs, more than doubled to 0.63% of loans from 0.26%.
At the beginning of the earnings season, Citigroup held a conference call where they essentially ducked the issue of upcoming quarters. Since then several financial companies have stated the upcoming quarters will also be difficult. This shouldn't be surprising in any way; it's just good to get confirmation about he overall situation.