Thursday, January 15, 2009
marshall & ilsley: devastating q4
In a bad sign for other regional banks, Marshall & Ilsley Corp said it was slashing its dividend and cutting its workforce and posted a surprising fourth-quarter loss as bad loans surged.
In the fourth quarter, Marshall & Ilsley increased the amount set aside for bad loans to $850.4 million from $235.1 million, as commercial and construction loan losses surged, especially among residential developers and in the states of Arizona and Florida. Net charge-offs more than tripled to $679.8 million.
"The nation's current recessionary climate is unlike any we have experienced," Chief Executive Mark Furlong said in a letter to shareholders.
CRE is a problem not only for the regionals but, of the big banks, particularly JPM and much of the insurance industry as well (standing out, life insurers). there is a lot of desperate capital raising still to come.