Sovereign Bancorp reports $817.3m loss
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Sovereign Bancorp Inc. swung to a large loss in the first quarter of 2009 as the region's third-largest bank absorbed an increase in bad loans and prepared for even steeper credit losses in the months ahead, according to its most recent filing with regulators.
The bank lost $817.3 million in the quarter, compared with a net income of $100.1 million in the same period a year ago. It also reported that it set aside $505 million for bad loans, up from $135 million a year ago. The Philadelphia-based holding company owns Sovereign Bank and was acquired in January by Spain's Banco Santander.
The bank's total allowance for loan losses was $1.3 billion at the end of the quarter. Sovereign also has a large exposure to soured investments: nearly $1 billion in unrealized losses on investment securities - losses it could have to write down as permanent in the future.
It had total assets of $78.1 billion, up from $77.1 billion a year ago.
A bank spokesman declined to comment yesterday. Sovereign recently announced plans to cut 950 jobs, or 8.8 percent of its workforce, including 265 positions in Massachusetts.
Sovereign experienced a near-run on its deposits last fall when a free fall in the credit markets spooked bank customers across the globe. But the latest report says its deposits and other customer accounts have increased to $50.5 billion, from $48.4 billion a year ago.
