Wachovia said Tuesday its fourth-quarter earnings tumbled 98 percent due to a $1.7 billion reduction in the value of certain portfolios and $1.5 billion set aside to cover bad loans. Fourth-quarter net income fell to $51 million, or 3 cents per share, from $2.3 billion, or $1.20 per share, during the same period the previous year.

Banks have been forced to reduce the value of bonds and debt backed by mortgages and other consumer loans that have increasingly defaulted in recent months. Wachovia took a $1.7 billion write-down (USD)