Wachovia, whose stock has tumbled 80 percent in 12 months because of unpaid mortgages, was in advanced talks Sunday night to sell itself...

Share story

U.S. banking

Wachovia, whose stock has tumbled 80 percent in 12 months because of unpaid mortgages, was in advanced talks Sunday night to sell itself to either Wells Fargo or Citigroup, The Wall Street Journal and The New York Times reported.

Neither suitor is likely to bid more than a few dollars a share for Wachovia, the Times said, citing people involved in the talks. The Charlotte, N.C., bank finished last week at $10 a share during regular trading and fell to $8.50 in extended hours.

The Federal Reserve and Treasury Department are involved in talks and are resisting guaranteeing part of Wachovia’s assets, the Times said. The report said the government also hasn’t agreed to a deal similar to Washington Mutual’s, whose banking operations were seized then sold to JPMorgan Chase.

Wachovia, the sixth-biggest U.S. bank by assets, paid more than $24 billion in 2006 for Golden West Financial, the California lender that specialized in option-ARM home mortgages. Those loans are prone to default because they allow borrowers to skip some interest payments and add them to the principal.

The terms backfired when housing markets weakened, leaving borrowers with loans bigger than home values.

European banking

Bradford &Bingley takeover imminent

Troubled British mortgage lender Bradford & Bingley will be nationalized and sold off in parts, with Spanish banking giant Santander taking over its retail deposits and branch network, British media reported today.

Bradford spokesman Tony McGarahan said an announcement would be made before the stock market opened.

The British government is likely to take on the bank’s toxic loans and fold them into Northern Rock, a mortgage lender nationalized in February, media reports said. The BBC said the Treasury will then try to sell the company’s 200 branches and savings business.

Bradford specializes in buy-to-let mortgages for rental properties, considered one of the most volatile parts of Britain’s troubled housing market. Investors who took out loans to buy apartments now find the value of their property has fallen and that rental income doesn’t cover mortgage payments.

Meanwhile Dutch-Belgian bank and insurance giant Fortis snagged a 11.2 billion euro ($16.4 billion) lifeline to avert insolvency as part of a wider bailout plan agreed to by Belgium, the Netherlands and Luxembourg, officials said Sunday.

Belgium’s Prime Minister Yves Leterme said Fortis will not be allowed to fall victim to the global credit crisis.

The deal will force the bank to sell its stake in Dutch bank ABN Amro, which it partially took over last year.

Belgian officials also announced Sunday that they planned to offer better guarantees for all retail deposits at Fortis, the country’s largest bank and largest private employer.

Gasoline

Price at pump slips 4 cents nationally

The average price of regular gasoline at U.S. filling stations fell to $3.66 a gallon, the oil industry Lundberg survey reported Sunday.

Gasoline dropped 4 cents in the two weeks ended Friday. Crude oil, which accounts for about 73 percent of gasoline’s pump price, has fallen 27 percent from a record $147.27 a barrel reached on July 11.

The highest average price for self-serve regular gasoline was $4.15 a gallon in Honolulu. The lowest was in Wichita, Kan., at $3.29 a gallon.

The average price in the Seattle-Bellevue-Everett area Sunday was $3.689, down from $3.693 Saturday, according to AAA’s Daily Fuel Gauge Report.

Aviation

Airbus jet plant opens in China

Airbus, starting its first A320 aircraft assembly today outside Europe, said it may buy up to $1 billion of components from China by 2020, as that nation may need 3,000 planes in the next 20 years.

Airbus will be able to assemble four A320s a month by 2011 in Tianjin city. That will bolster Airbus’ procurement from the country from last year’s $70 million, said Chief Executive Tom Enders.

Airbus is poised to sign a 280-aircraft order with Chinese airlines in January, Chief Commercial Officer John Leahy said.

The order, comprising A320, A330 and A350 models, is pending approval by the Chinese government, and may be split into two parts, he said.

Delivery at the factory, about 60 miles southeast of Beijing, is due to start in mid-2009.

Compiled from Bloomberg News and The Associated Press