Wachovia's Wall of Worry

Damage from the mortgage crisis has slammed the financial giant's earnings and forced it to seek capital and slash its dividend. Will other banks have to follow suit?
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Wachovia (WB) expects to be inundated by problems in the housing market. So, the fourth-largest U.S. bank took some drastic steps on Apr. 14. It set aside $2.8 billion to handle rising losses on loans, most of them home mortgages. To prepare for even more losses, the bank said it will seek $7 billion to $8 billion in new capital, new stock that is certain to dilute current shareholders' stakes. Also, the bank's dividend will be slashed 41%, a move that will save the bank $2.1 billion over the next year.

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