Sep 29, 2008 1:03 pm US/Eastern
Fast Facts: Wachovia Sale To Wells Fargo
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Wells Fargo has stepped in to purchase Wachovia, instead of the original buyer, Citigroup.
CBS
In an abrupt change, Citigroup will not be purchasing Wachovia.
Instead, Wells Farog announced it intended to purchase Wachovia,
Florida's largest
bank. Wachovia did not
fail, but the bank has been troubled by a large portfolio of sub-prime
mortgages and had been seeking a stronger buyer.
Here are some questions, and answers, about the Wachovia sale to Wells Fargo.
Is my money safe?Yes. All deposits are unaffected, no matter what the size, because Wachovia was sold and did not fail. FDIC insurance, which could have imposed limits on what some depositors would have received, was not used.
Are the ATMs working? What about my Wachovia checks and credit cards?
All may be used normally. Your credit cards still work, ATMs are operating normally, and your Wachovia checks will still be honored by the bank and should be accepted by merchants. All branches are open and all banking services should be operated as usual by the same people who were there Friday.
I have a mortgage with Wachovia? Will anything change with it?You should continue to make scheduled payments to the same place. Your terms will not change and your obligation remains the same. The same situation holds true for credit card payments and consumer loans.
I was in the process of getting a credit card/mortgage. Will the process continue?There should be no change in the process, as Wachovia is still in control of the bank pending the closing of the sale.
Will the name of the bank change?Most likely. Wachovia sold only it's retail banking operations, but Wachovia Corporation will still continue to operate its asset management, retail brokerage, and certain select parts of its wealth management businesses, including the Evergreen and Wachovia Securities franchises. Wells Fargo did not say when it might begin merging operations or changing the name.
Is the change immediate?No. Unlike the Washington Mutual failure and sale, where JP Morgan Chase took over the bank immediately, the Wachovia sale must be approved by the stockholders of both companies. It is expected to take the rest of 2008 before the sale is completed.
What is the difference between what happened with Wachovia and what happened at Washington Mutual?Washington Mutual actually failed before the FDIC sold its assets; Wachovia did not fail. It was a going concern when Citigroup initially purchased both assets and liabilities of the banking operation, and that also applies to Wells Fargo who has since stepped in as the purchaser. This makes it similar to previous bank purchases, such as when Wachovia moved into Florida by merging with First Union.
I work for Wachovia in Florida. Will I lose my job because of this?Nationwide, Citibank and Wachovia have about a 5% 'overlap', according to Citi. This means the two banking networks should meld well without many branch closures. However, as in other bank sales, some 'back office' operation could be consolidated in the future with an impact on jobs.
I have stock in Wachovia. What happens to me?Wachovia stock continues to be traded, though in trading the day of the announcement it lost most of it's value. The Friday before the announcement, Wachovia stock traded at over $10 a share. When the market opened the Monday of the announcement, the stock had dropped to under $1 a share. However, unlike the Washington Mutual failure, the stock was not made valueless by the sale.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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