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Treasury official is named CEO of Wachovia

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From the Associated Press

Wachovia Corp., the fourth-largest U.S. bank, named Treasury Undersecretary Robert K. Steel chief executive Wednesday, ending a nearly six-week search for a new leader.

The Charlotte, N.C.-based bank also said it had set aside $4.2 billion pretax to cover bad loans for the second quarter, leading to an estimated loss of about $2.6 billion to $2.8 billion.

The quarterly per-share loss will equal $1.23 to $1.33, excluding an expected write-down of goodwill. Analysts polled by Thomson Financial expected a profit. The company will announce its results for the period July 22.

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Steel succeeds Ken Thompson, who was ousted by the bank’s board in June after a series of missteps. Among them was Thompson’s decision to buy Oakland-based mortgage lender Golden West Financial Corp. in 2006 for more than $24 billion at the height of the nation’s housing boom.

Steel, 56, who has been the Treasury Department’s liaison with Wall Street since the fall of 2006, announced his resignation Wednesday, effective immediately. He is an alumnus of investment bank Goldman Sachs.

Treasury Secretary Henry M. Paulson Jr. praised Steel and said, “I know he will excel in his future endeavors.”

Lanty Smith, who had been serving as interim chief executive, will remain Wachovia’s chairman.

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