Difference between writedown and credit loss

Definition – the difference between a write-down and a credit loss: Investment banks and the investment-banking units of financial conglomerates mark their assets to market values, whether they’re loans, securities or collateralized debt obligations, and label that a “writedown” when values decline. Commercial banks take charge-offs on loans that have defaulted and increase reserves for …

Wells Fargo Net Credit Loss at $892 Million, HSBC Cross-selling

Wells reported net credit losses of $892 million, up 35 percent from a year earlier. About half of the increase stemmed from home equity loans, where lower housing prices caused steeper than expected losses, Chief Credit Officer Mike Loughlin said. There is a way to increase profits, however, and Wells Fargo found the way. The …

Citigroup loyal to customers while experiencing big losses

Citigroup reported Friday a first-quarter net loss of 5.1 billion dollars, hurt by at least 12 billion dollars in write-downs amid soured subprime investments, and said it would cut an additional 9,000 jobs. Will Citigroup look for reasons to raise credit card rates, as we see with other banks involved with subprime? Although Citigroup has …