US bank Wachovia, which has been acquired by rival Wells Fargo after a legal tussle with Citi, said it made a net loss in the third quarter of 2008 of $23.9 billion comparing with a net income of $1.6 billion in the same period of 2007, as heavy credit write-downs and weak markets took their toll.

Wachovia has been purchased by Wells Fargo for $14 billion. Wachovia said its net loss included the following items on a pre-tax basis: $18.8 billion of goodwill impairment; $4.8 billion credit reserve; $2.5 billion of market disruption losses and $310 million principal investing loss.

At the wealth management arm of Wachovia, meanwhile, earnings rose to $84 million in the quarter from $80 million a year before. Fee and other income rose to $102 million from $184 million, the bank said in a statement.

As a result of net outflows and falls in asset prices, assets in the wealth unit of Wachovia dropped by 13 per cent from the end of December, 2007, to $73.2 billion.

For the bank as a whole, results also reflected costs relating to previous announcements on the auction rate securities settlement, support of Evergreen money market fund exposure to Lehman Brothers and losses on government sponsored entity preferred stock of $1.1 billion, the bank said.

Robert Steel, chief executive and president said: "In these unprecedented times, my colleagues have demonstrated that Wachovia always puts the interests of our customers and clients first. Although this has been a challenging quarter, Wachovia's underlying businesses remain solid and our franchise exceptionally attractive. We look forward to the opportunities that lie ahead as we join forces with Wells Fargo."

Earlier in October, Wells Fargo won a merger and acquisition battle against Citi to buy Wachovia. Wells Fargo and Wachovia both operate wealth management businesses but in contrast to Citi, these are predominantly domestic US operations.