CHARLOTTE, N.C. - Wachovia Corp., the nation's fourth-largest bank, named Treasury Undersecretary Robert Steel chief executive on Wednesday.
The Charlotte-based bank also said it has set aside $4.2 billion pretax to cover bad loans for the quarter, leading to an estimated second-quarter loss of $2.6 billion to $2.8 billion. The quarterly loss will equal $1.23 to $1.33 per share, excluding an expected write-down of good will. Analysts polled by Thomson First Call had expected a profit.
Wachovia is expected to release second-quarter earnings on July 22.
Steel succeeds Ken Thompson, who was ousted by the bank's board in June after a series of missteps. Among them was his decision to buy mortgage lender Golden West Financial Corp. in 2006 for roughly $25 billion at the height of the U.S. housing boom.
Steel, 56, who has been the Treasury Department's liaison with Wall Street since autumn 2006, announced his resignation Wednesday, effective immediately. He is an alumnus of investment bank Goldman Sachs Group Inc.
Lanty Smith, who'd been interim chief executive, will remain Wachovia's chairman.
The announcement of a new CEO may hush market rumors that Wachovia is an acquisition target, though the selection of Steel could also fuel questions about the relationship between Wachovia and Goldman Sachs, which has been rumored to be interested in acquiring the bank. Wachovia last month hired Goldman Sachs to analyze its troubled loan portfolio.