Bank of America, second-biggest bank of US, has accepted that its fourth-quarter results may get affected because of chaos in the credits market. BofA had $12.8 billion in liquidity support for CDO at the end of September. $9.8 billion of these are subprime related and $2.4 billion are in CDO trading.
JPMorgan Chase, third-biggest bank of US, is likely to write down more of its mortgage holdings in the fourth quarter depending on market conditions. JPMorgan had more than $40 billion in leveraged loans and unfinanced commitments on September 30. In the third quarter, JPMorgan wrote down $1.3 billion on leveraged loans and $339 million on C.D.O.’s.
Wachovia, fourth-biggest bank of US, had declared a loss of about $1.1 billion in October on assets backed mortgages. Earlier, Wachovia had reported $1.3 billion losses and write-downs in the third quarter of 2007. Its fourth-quarter result will be hurt by uncertainty in the credit markets to the extent of about $1.7 billion. Wachovia had high involvement in CDO transactions last year.
Barclays Plc, third-largest bank of UK, is yet to declare its involvement in the sub-prime mortgage securities. It had suffered a $4 billion hit due to trading, defaults and write-downs of CDOs in the third quarter. Speculations are high on its write-downs in fourth quarter.
Fourth quarter is going to be very tough for these banks as the liquidity crunch is worsening. Moreover their other sources of revenue like investment banking fees and trading gains are also getting marginalized.
JPMorgan Chase, third-biggest bank of US, is likely to write down more of its mortgage holdings in the fourth quarter depending on market conditions. JPMorgan had more than $40 billion in leveraged loans and unfinanced commitments on September 30. In the third quarter, JPMorgan wrote down $1.3 billion on leveraged loans and $339 million on C.D.O.’s.
Wachovia, fourth-biggest bank of US, had declared a loss of about $1.1 billion in October on assets backed mortgages. Earlier, Wachovia had reported $1.3 billion losses and write-downs in the third quarter of 2007. Its fourth-quarter result will be hurt by uncertainty in the credit markets to the extent of about $1.7 billion. Wachovia had high involvement in CDO transactions last year.
Barclays Plc, third-largest bank of UK, is yet to declare its involvement in the sub-prime mortgage securities. It had suffered a $4 billion hit due to trading, defaults and write-downs of CDOs in the third quarter. Speculations are high on its write-downs in fourth quarter.
Fourth quarter is going to be very tough for these banks as the liquidity crunch is worsening. Moreover their other sources of revenue like investment banking fees and trading gains are also getting marginalized.
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