Wachovia Corp said on Friday it suffered a $1.1 billion loss on subprime mortgage-related debt in October, while Capital One Financial Corp said more customers are having trouble paying their bills as the U.S. credit crisis deepened.
Wachovia, the fourth-largest U.S. bank said the value of so-called asset-backed collateralized debt obligations (CDOs) it holds fell to $676 million as of October 31 from $1.8 billion on September 30. The $1.1 billion pretax loss is in addition to $347 million in the third quarter, Wachovia said.
Wachovia also said it expects to boost loan losses by $500 million to $600 million this quarter, largely in geographic areas that have faced dramatic declines in housing values.
Wachovia shares dropped $1.83, or 4.5 percent, to $38.47 in early electronic trading.
Charlotte, North Carolina-based Wachovia joined a growing list of financial companies -- including Citigroup Inc, Merrill Lynch & Co Inc and Morgan Stanley -- that have reported losses from worsening conditions in consumer credit and capital markets.
Credit analysts at Citigroup this week estimated industrywide losses from asset-backed CDOs could reach $64 billion.
Capital One, the largest independent MasterCard and Visa credit card issuer, said on Friday its rate of net charge-offs on a managed basis rose to 3.28 percent in October from 2.86 percent in the third quarter.
The charge-off rate in U.S. cards rose to 5.11 percent from 4.13 percent in the same periods, while the rate of loans at least 30 days past due rose to 4.75 percent from 4.46 percent.
On Tuesday, Capital One boosted its forecast for 2008 credit losses to between $4.9 billion and the mid-$5 billion range. It had projected $4.9 billion on October 18.
Wachovia and Capital One made their disclosures in U.S. Securities and Exchange Commission filings. Wachovia is expected to file its quarterly report with the agency later Friday.
Bank of America Corp, the nation's second-largest bank and by far its largest consumer bank, is also expected to file its quarterly report later Friday.
Separately, Wachovia said it will reduce reported third-quarter profit by $72 million, or 4 cents per share, to reflect its share of Visa Inc.'s $2.1 billion antitrust litigation settlement with American Express Co on Wednesday.
Last month, Wachovia reported quarterly profit of $1.69 billion, or 89 cents per share.
(Reporting by Jonathan Stempel; Additional reporting by Michael Erman, Joseph A. Giannone and Franklin Paul; Editing by Jeffrey Benkoe)