Wachovia Corp shares fell on Monday after concerns that the bank may cut its dividend and buy back its stake in a brokerage venture with Prudential Financial Inc.
Shares of Wachovia fell 67 cents, or 4.13 percent, to $15.56 at 3:02 p.m. in late afternoon trading.
Analysts at Fox-Pitt Kelton Cochran Caronia Waller indicated risks that Wachovia, along with Comerica and Marshall & Ilsley were most at risk at having their dividends cut.
We expect more banks to raise capital and cut dividends given severity of housing-related credit costs,'' analyst Andrew Marquardt wrote in a note to clients on Monday.
Meanwhile, a report in the New York Post today stated that Wachovia could be forced to buy back its share of a retail brokerage joint venture if prudential chooses to exercise that option.
Prudential could force the sale of a 23 percent stake, which could be worth as much as $5 billion. However Wachovia would have up to twelve months to buy back the stake. Prudential could also choose to boost its stake in the venture, which began about 5 years ago.