Wednesday, February 07, 2007

Net Bank

News on another lender existing the sub-prime arena:

NEW YORK, Feb 6 (Reuters) - Online bank and mortgage lender NetBank Inc. (NTBK.O: Quote, Profile , Research) said on Tuesday it expected to post a much steeper than expected fourth-quarter loss as it moved to shut down its subprime mortgage business.
NetBank had previously forecast an aftertax loss of 74 cents to 87 cents in the quarter, but now expects the result to fall "far below" that estimate, provided on Dec. 18, it said in a regulatory filing.

As a result of its shutdown of the mortgage business, which was completed in the fourth quarter, NetBank has been forced to buy back from investors the loans that were defaulted, leading to $26 million more in provisions than it was expecting, the bank said.

NetBank also said it expects to set aside between 48 cents and 52 cents a share in the fourth quarter for the possibility that it may not be able to reduce future taxes with current losses.

1 comment:

Mozo Maz said...

I think you can sum up the subprime consolidation taking place, with just one word.


You can turn a lot of rocks over, talking about credit spreads and default swaps, etc... But buybacks are the big engine on this train.