Wachovia has ousted its chief executive, sending the bank's shares lower on speculation that loan losses tied to the purchase of a big mortgage lender could widen.
The fourth-largest US bank's move to replace Ken Thompson, who has presided over a 57 per cent drop in its share price over the past year, also raised speculation the bank could become a takeover target.
Wachovia shares fell as much as 4.5 percent before recovering to trade down 1.4 per cent, or 34 cents, at $23.46 during last night's session on the New York Stock Exchange.
Lanty Smith (65) who replaced Mr Thompson as chairman last month, was named interim chief executive, Wachovia said yesterday. Ben Jenkins (64) the vice chairman and head of Wachovia's retail and business bank, was named interim chief operating officer.
Wachovia said it asked Mr Thompson to quit a few days ago, and made the formal decision to replace him on Sunday.
Mr Thompson (57) had been chief executive since April 2000, and until last month had been chairman for five years. He joins a growing list of top banking chiefs to lose their jobs since the global credit crisis began last summer, including Citigroup's Charles Prince and Merrill Lynch & Co's Stanley O'Neal.