Zions Bancorporation, Utah's biggest lender, said the new Volcker Rule forces the company to get rid of some prohibited holdings at a cost of about $387 million.
The bank can no longer keep trust-preferred collateralized debt obligations (CDOs) issued by banks and insurers until they mature, the Salt Lake City-based firm said today in a statement. Other asset-backed CDOs are included in the non-cash charge, which Zions said may be bigger or smaller depending on how sales mandated by the Volcker Rule affect prices.
The cost is more than Zions earned for any calendar year since 2007, marring the turnaround engineered by Chief Executive Officer Harris Simmons. The bank has posted two profitable years after three straight losses starting in 2008 that were driven by soured real estate loans and charges tied to CDOs. The disclosure by Zions spurred speculation of similar writedowns at U.S. banks.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
- Exclusive discounts on ALM and Treasury & Risk events.
- Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
*May exclude premium content
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
