Home / Business / Markets / Bank of America is questioning the understanding with a South African tradesman that blew a $1 billion hole by Wall Street bank gain (BAC)

Bank of America is questioning the understanding with a South African tradesman that blew a $1 billion hole by Wall Street bank gain (BAC)

Brian MoynihanREUTERS/Robert Galbraith

  • A handful of banks done a loan to the ex-chairman of South African tradesman Steinhoff International
  • The loan went belly-up after Steinhoff became inextricable in an accounting scandal.
  • That cost Wall Street banks over $1 billion on their fourth-quarter earnings.
  • Bank of America has hired an outward law organisation to figure out either the waste could’ve been prevented, according to The Wall Street Journal. 

A bad loan to the ex-chairman of embattled South African tradesman Steinhoff International cost Wall Street banks over $1 billion on their fourth-quarter earnings — and Bank of America would like to know how it was means to happen.

The bank, which booked a $292 million charge associated to Steinhoff in the fourth quarter, hired outward law firm Davis Polk Wardwell late last year to examine the €1.6 billion ($2 billion) loan to Steinhoff’s former authority Christo Weiss that a handful of global banks — including Citigroup, JPMorgan, and Goldman Sachs — took partial in, according to a report in The Wall Street Journal.

After Steinhoff became inextricable in an accounting scandal, the share-backed loan went belly-up, and the banks as a organisation were on the offshoot for over $1 billion in losses.

Davis Polk Wardwell is interviewing Bank of America employees and questioning either there’s any way the waste could’ve been avoided, gripping the company’s house familiar of the inquiry’s progress, according to the WSJ.

“One of the reasons we have record-low credit waste is since we take the time to investigate what happened when things don’t go as designed and learn from it. It’s the obliged thing for a financial establishment to do,” a bank orator told the WSJ.

Read the full story at The Wall Street Journal.

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