In the latest blow to the beleaguered financial sector, Regions Financial Corp. (RF) said it would set aside $360 million in the fourth quarter to cover loan charge-offs in its residential builder loan portfolio and other non-performing assets. Its shares, which have already lost more than 38% over the past year, were indicated about 4% lower in pre-market activity following the news.
Regions joins a growing list of financial institutions to report pressure from the downturn in the U.S. housing market and weakening credit conditions due to the fall-out in subprime mortgage lending.
Regions is the parent of Morgan Keegan whose bond fund clients who suffered investment losses in the open ended Morgan Keegan Select Intermediate Bond Fund, Regions Morgan Keegan Select High Income Fund and closed end funds RMK Multi Sector High Income Fund (RHY), RMK Strategic Income Fund (RSF), RMK Advantage Income Fund (RMA) and the RMK High Income Fund (RMH).
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