Firm Said To Have Fired 24% Of Investment Bankers Since 2007

You can now add the name Wachovia to the list of those firms (including Commerzbank, Rabobank and WestLB - and to a lesser extent, Bank of America and HSBC) which flirted with investment banking and came out the other side with their tails firmly between their legs.

Wachovia came out Monday and said that it had posted a surprise $393m first-quarter loss, after $1.6bn in writedowns on US subprime lending-related assets and LBOs and consumer and commercial mortgages. The bank also announced that it would axe some 500 jobs from its corporate and investment banking unit (about 12% of the total), taking jobs losses in the division to around 24% since the beginning of 2007. The firm also said that it was raising another $7bn from shareholders to beef up its balance sheet.

Bloomberg reports that Samuel Israel, co-founder of hedge fund group Bayou, was before a US District Judge Monday, getting sentenced after pleading guilty of involvement in a $400m fraud on investors. He told investors that: 'I lied to you and I cheated you and I cannot put into words how sorry I am'. Neither the apologies nor his 9 back operations, painkiller addiction, spinal rod and pacemaker carried much weight with the judge, however. He got banged up for 20 years and was ordered to forfeit $300m.

The New York Times reports that Bear Stearns said Monday that its fiscal first-quarter profit had fallen 79% to $110m. Revenue fell to $1.48bn in the period, from $2.48bn a year earlier.

The Financial Times reports that, according to unnamed 'people close to the situation', Citigroup is allowing the private equity groups bidding for the $12bn in LBO loan assets it is selling to clean up its balance sheet to 'cherry-pick' the assets they want, rather than selling them off in bulk. If true, this kind of defeats the object of the exercise, as those private equity types will no doubt pick off the less risky assets, leaving Citi still holding the baby.

Finally, The Independent reports that, according to new research released by Ernst & Young, the money raised by way of IPO by companies listing on the London Stock Exchange fell some 90% in the first-quarter to just $325m.

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