Well, at least he did not make any promises..
If I am being honest, I was pulling for JP Morgan’s (JPM) Jamie Dimon to be the new head of the bank.
Wachovia (WB) introduce CEO Robert Steel but the bank provided no details about its future direction other than to call “silly” the rumors that it will sell itself to its recently hired advisor, Goldman Sachs Group(GS). Steel suggested he would provided more details about the bank’s direction on July 22, when Wachovia fully reports and explains its second-quarter earnings results.
During a conference call presentation, Chairman Lanty Smith said banking regulators are “delighted” with the choice of Steel, a 28 year Goldman alumnus who left his position as under secretary of the U.S. Treasury to take the helm of the bank.
Steel has decades of experience in the banking industry, as both a banker and regulator but has no experience running a large commercial bank. Smith said during the presentation that finding a leader with extensive experience running retail banking operations, Wachovia’s main business, wasn’t a priority for Wachovia, which has lately found itself in the middle of both regulators and Department of Justice probes.
It would seem that possibly political and industry connection were at this point the priority.
Consider at the Treasury Department, he worked with lawmakers on legislation to strengthen the agency that regulates mortgage companies Fannie Mae (FNM) and Freddie Mac (FRE). Steel was also involved in JPMorgan Chase (JPM) spring bailout of the investment bank Bear Stearns (BSC).
If that was not enough,bank also said it has set aside $4.2 billion pretax to cover bad loans for the quarter, leading to an estimated second-quarter loss of about $2.6 billion to $2.8 billion.
The quarterly loss will equal $1.23 to $1.33 per share, excluding an expected write-down of goodwill and the bank declined to offer specifics on whether it needs more capital or might again cut its dividend
All in all, it is a mess but they got a guy connected enough to fix it. Time will tell
Disclosure (“none” means no position):Long WB,None
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One reply on “Wachovia Names New CEO”
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