Wachovia nearly doubles its 1Q loss to $708 million

By IEVA M. AUGSTUMS

updated 4:35 p.m. ET May 6, 2008

CHARLOTTE, N.C. - Wachovia Corp. said Tuesday it is nearly doubling previously reported losses for the first quarter after reviewing its portfolio of bank-owned life insurance.

The Charlotte-based bank said it lost $708 million, or 36 cents per share, during the January-March period, according to a filing with the Securities and Exchange Commission. It previously said losses totaled $393 million, or 20 cents per share, during the quarter.

Shares of Wachovia rose 30 cents to $30.08 Tuesday.

In the filing, Wachovia said it had reviewed information regarding stable value agreements totaling $360 million, which were provided by a third-party guarantor with respect to three contracts within its bank-owned life insurance portfolio.

After reviewing agreements tied to those contracts, Wachovia recorded additional losses of $315 million during the first quarter.

It was the latest blow for the nation's fourth-largest bank, which in April announced a 41 percent cut to its dividend.

Last week, the bank said it may take an after-tax charge of between $800 million and $1 billion in the second quarter tied to past leasing transactions.

Last month, Wachovia said it would pay $144 million to settle federal allegations that it failed to stop telemarketers who took advantage of thousands of elderly consumers.

Reports have also circulated that federal prosecutors are investigating Wachovia in a probe into alleged laundering of drug proceeds by Colombian and Mexican money-transfer companies.

The bank recently raised $8.05 billion in a share offering to bolster its balance sheet.

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On the Net:

Wachovia Corp.: http://www.wachovia.com

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