DOW JONES NEWSWIRES
Marshall & Ilsley (MI) said bad loans fell in the third
quarter for the first time on a sequential basis in four years, a
possible sign that the credit woes affecting banks may have
peaked.
But shares fell 3 cents to $7.91 as the company also projected a
quarterly loss wider than analysts' expectations amid a nearly $185
million loss provision on holding-company loans.
"While we see some continuation of improvement in credit
quality, and read these as hopeful signs of what's ahead, we will
continue to manage the business as though the recessionary effects
in the economy will remain for several more months," said President
and Chief Executive Mark Furlong. "There simply are an inadequate
number of consistent trends to reinforce the sentiments that the
economy is stabilizing and better times are within sight."
Wisconsin's largest bank has cut costs and jobs and slashed its
dividend to preserve cash. It has struggled with heavy exposure to
some of the most troubled housing markets, as well as commercial
construction loans.
The company said Tuesday it expected nonperforming loans to fall
$170 million from the second quarter, or 4.9% of total loans. It
also sees early stage delinquencies down $220 million, or 20%,
sequentially, putting them at the lowest level in six quarters.
The company reiterated its forecast for a loan-loss provision of
$390 million to $400 million, excluding nearly $185 million for
holding-company loans. That compares with the $468.2 million in the
second quarter and $155 million a year earlier. Marshall &
Ilsley said the special provision was due to new regulations on
bank holding companies.
As a result, the company projected a loss of 68 cents to 70
cents a share. The mean estimate of analysts surveyed by Thomson
Reuters was a loss of 39 cents.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com