Jan. 27 (Bloomberg) -- Zions Bancorporation, Utah’s biggest bank, reported a fourth-quarter loss as costs tied to the new Volcker Rule wiped out the firm’s earnings.
The loss amounted to $41.5 million, or 32 cents a common share, compared with a profit of $58.3 million, or 19 cents, a year earlier, the Salt Lake City-based lender said today in a statement. Full-year net income decreased 25 percent before preferred dividends and redemptions to $263.8 million, or $1.58 a share.
Zions said Jan. 21 it lost money in the quarter after disposing of some holdings to comply with the Volcker Rule’s ban on owning riskier securities.
The bank warned in December that the Volcker Rule’s costs could exceed annual profit because it had to sell some of its trust-preferred collateralized debt obligations. Zions later said the damage would be softened because regulators decided lenders could keep some of the disputed holdings.
The rule is named after Paul Volcker, the former Federal Reserve chairman who sought to keep banks from making risky bets that might cause their collapse and endanger the financial system. The impact on Zions had prompted complaints from regional and community lenders that they were being hurt by a regulation that wasn’t meant for them.
Shares of Zions, led by Chief Executive Officer Harris Simmons, dropped 1 percent to $29.93 at 4 p.m. today in New York.
To contact the reporter on this story: Elizabeth Dexheimer in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Peter Eichenbaum at email@example.com