Wachovia names Robert Steel CEO amid more losses

Wachovia has revealed a $8.9 billion loss for the second quarter.

The news comes shortly after the bank appointed Robert Steel as chief executive officer earlier this month. Steel joined from the US Department of Treasury, where he had served as under-secretary for domestic finance since October 2006, leading the department’s activities on the domestic financial system, fiscal policy and operations, and government assets and liabilities. Lanty Smith has been serving as interim chief executive since Ken Thompson stepped down “at the request of the board” on June 2. Smith has now resumed his prior role as chairman of the bank.

Wachovia and Washington Mutual are among the banks that have taken the decision to split the roles of chairman and chief executive since the start of the credit crisis. The combined chief executive and chairman role has been criticised for not providing enough checks on the power of the CEO, and separating the roles is expected to result in better assessment of business decisions.

At the same time as Wachovia disclosed a $8.9 billion loss for the second quarter, its corporate and investment banking division reported writedowns of $565 million, covering market valuation losses on a range of mortgage structured products and collateralised debt obligations. For the first quarter of the year, the bank reported a loss of $350 million.

“Clearly, there are challenges ahead in our current climate, but I am encouraged that most areas of the company continue to perform well. Under the leadership of the board, the management team has recently been taking decisive actions to face current challenges head on, and I am delighted to have an opportunity to build on that progress,” said Steel.

See also:
Smith steps into the breach at Wachovia
Wachovia appoints Lanty Smith board chairman
Reporting for duty