updated 12/12/2007 2:06:02 PM ET 2007-12-12T19:06:02

Wachovia Corp. doubled its estimate of loan loss provisions to about $1 billion for the fourth quarter on Wednesday, while the chief executive of rival Bank of America Corp. said he expects current credit market turbulence to extend into 2008.

A third major bank, PNC Financial Services Group Inc., said its adjusted credit loss provision for the last three months of the year will be more than twice as large as in the third quarter.

The disclosures come as a number of the nations’ banks have forecast increasing credit losses in the wake of last summer’s subprime mortgage crisis.

In a filing with the Securities and Exchange Commission last month, Charlotte-based Wachovia had said it expected to record a loan loss provision in the fourth quarter between $500 million and $600 million.

In a discussion with financial analysts in New York, Wachovia’s chief executive Ken Thompson said the updated figures “will position us better as we enter 2008.”

He added that he is “comfortable” that his bank will “grow earnings” in next year, but gave no specific forecast.

All three were making presentations at an investment conference in New York hosted by Goldman Sachs.

In a client note to investors, Morgan Keegan & Co. analyst Robert S. Patten said “We remain cautious in our near-term outlook, as there is no good news that we expect from the banks as they work their way through these credit and liquidity issues.”

In a separate presentation, Bank of America’s chief executive Ken Lewis said, “the economy is definitely slowing.”

“We expect weak fourth and first quarters, but at this point we are not forecasting a recession,” Lewis said. “I think you certainly can assume results will again be quite disappointing.”

In November, Bank of America said it would take a $3.3 billion debt-related write-down in the fourth quarter and warned its losses could grow, adding to fears the nation’s housing and mortgage-lending slump might exact a greater toll than in the wretched third quarter — when industrywide write-downs topped $46 billion.

The bank said it will also spend about $600 million to support a group of its money market funds because of “uncertainty around the value” of the funds’ investments. Of specific concern are the funds’ holdings in structured investment vehicles, which use borrowed money to make risky but potentially high-yielding investments.

On Monday, Bank of America said it would liquidate a privately placed, enhanced institutional cash fund, closing it off to new investors, due to withering losses on complex asset-backed securities.

“Based on conditions today, we expect those writedowns will be larger than have already been reported - although obviously we won’t know our final numbers until we close the fourth quarter,” Lewis said. “We will discuss those numbers on the January earnings call.”

Also on Wednesday, PNC Financial Services said in a regulatory filing that it expects to report fourth-quarter earnings in the range of 60 cents to 75 cents a share, and adjusted earnings will be between $1 and $1.15 a share.

Analysts polled by Thomson Financial, on average, forecast a profit of $1.39 a share for the Pittsburgh-based company. Those estimates typically exclude one-time items.

The company said its adjusted provision for credit losses is expected to be about $110 million in the fourth quarter, up $45 million from the previous quarter.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.40%
$30K home equity loan FICO 5.80%
$75K home equity loan FICO 4.54%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.70%
13.70%
Cash Back Cards 17.66%
17.91%
Rewards Cards 17.05%
17.17%
Source: Bankrate.com