In the latest round of banking news associated with the financial crises of bad loans Wachovia will “sell” it’s banking arm to Citigroup. Citigroup will take over some $42 billion in loan loses from Wachovia after that company has seen it’s share price fall some 75% this year. Over the weekend pressure mounted to seize Wachovia’s assists and sell off the parts to interested parties which included Citigroup, Wells Fargo and others. The loan losses at Wachovia started racking up after it’s purchase of Golden West Financial which held much of it’s paper in the overpriced California mortgage market. As a result of that alone with other missteps such as the AG Edwards acquisition the long time CEO, G. Kennedy Thompson, was removed in June but by then it was to late for Wachovia.
Wachovia stock closed at $10 on Friday however expectations are for Citigroup to offer less than $2 on Monday.
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