Wachovia (WB) begins to address its real estate and loan problems. Today the company announced it was cutting its quarterly dividend by 41.4% to 37.5 cents per share versus 64 cents per share in the prior quarter. The interesting question is whether other financial firms will follow suit. The company's current S&P Quality Ranking is B+. Additionally, the company announced:
- it is seeking a $7 billion cash injection to make up for a poorly timed expansion of its mortgage business.
- it took write-downs of $2 billion during the quarter related to the credit crunch.
- it set aside $2.8 billion to cover problem loans, up from $1.5 billion in the fourth quarter.
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