In the euro area, write-downs
so far have totaled $154 billion, with another $750 billion in write-downs
expected through 2010.
However, in light of the adverse effects of the global financial crisis, the bank adopted a conservative and prudent approach to the valuation of its private equity portfolio and recorded investment write-downs
The three lenders posted CAD2.26bn in pre-tax write-downs
, adding to about CAS2.3bn taken by Bank of Montreal (NYSE: BMO), Bank of Nova Scotia (NYSE: BNS) and Royal Bank of Canada (NYSE: RY) (TSX: RY).
The company said its write-down
was $170.7 million "in light of the current market conditions."
The funds at Bear Stearns, which contained some of the highest-risk securities available, collapsed in June 2007, causing more than $350 billion in write-downs
and culminating in the demise of one of the nation's largest underwriters of mortgage bonds.
This, in turn, can trigger write-downs
, and enough write-downs
can create problems with creditors.
A&L, which employs more than 2,000 people at its commercial banking arm in Bootle, said operating profits without the write-downs
would have been flat for the first four months of the year.
Strong and Meyer (1987) identify a change in senior management as the primary reason for write-down
decisions and document a positive stock price effect, which they interpret as write-downs
being a signal of future events, similar to stock splits.
The fourth quarter results include a pre-tax bulk wine inventory write-down
of $4 million, employee severance packages worth $2.9 million, and grape contract buyouts of $1.2 million, all of which were offset by a pre-tax gain of $41.2 million on sales of assets.
* Asset write-downs
are included in core earnings but gains/losses on asset sales are not.
SHARES in Cordiant, the old Saatchi & Saatchi advertising giant, slid again yesterday on fears about the size of the group's expected write-downs