Mounting speculation that more losses are in the offing has pulled Wachovia's share price down the lowest since more than a decade even as the fourth-largest American bank took steps to sack its CEO and former chairman Kennedy Thompson.

Thompson's departure was not entirely unexpected after the board of directors had stripped him of the chairman's role on 6 May forced by shareholders, incensed by the biggest quarterly loss since 2000, demanding his removal at April's annual meeting.

He joins several other CEOs at financial companies including Citigroup's Charles Prince and Merrill Lynch's Stanley O'Neal who lost their jobs to the global credit crunch. He leaves the bank after serving as CEO since April 2000, and until last month had been chairman for five years. In all, he spent 32 years at Wachovia, heading its Florida and investment banking operations before succeeding Edward Crutchfield Jr. as CEO.

Lanty Smith, who replaced Thompson as chairman, was named interim chief executive, Wachovia said on Monday. Ben Jenkins, the vice chairman and head of Wachovia's retail and business bank, was named interim chief operating officer.

The bank dropped 1.5 per cent or 40 cents to $23.40 at 4:15 p.m. in New York Stock Exchange composite trading, bringing this year's decline to 38 per cent. If the last 12 months are considered, cumulative losses in market capitalization add up to a whopping 57 per cent.

After this announcement, analysts speculate that the bank may declare additional losses leaving it vulnerable to a takeover or other form of distress sale. Potential candidates include JPMorgan Chase, Wells Fargo, US Bancorp and non-American banks such as Banco Santander SA.

Wachovia's board asked Thompson to leave ''several days ago'' and acted yesterday, Smith said during a news conference. No single event precipitated Wachovia's decision, Smith said, adding that while the bank isn't immune to industry conditions, which continue to deteriorate, Wachovia doesn't face any ''crisis'' or need to raise more capital. However, he compounded this statement with the James Bond-like addendum ''one never says never.''

For many years, Thompson held a reputation for smoothly integrating acquisitions, such as the $13.7 billion purchase in 2004 of another Southeast US bank, SouthTrust Corp. However, his credibility was dented after he said this year that Wachovia's $24 billion purchase of Golden West Financial Corp in 2006 at the peak of the housing boom was ''ill-timed.'' About half of the unit's lending is in California and Florida, two states with some of the highest foreclosure rates, and in the current crisis compounded the bank's problems manifold.

His reputation took another beating on 6 May when the bank said its first-quarter loss was $708 million, 80 per cent more than what Wachovia previously reported, because of write-downs for bank-owned insurance policies. Wachovia cut its dividend by 41 per cent in April and raised about $8 billion in new capital.

Thompson has $7.25 million of stock options that will vest upon his departure. He also gets severance pay of $1.45 million, or 16 months of his salary, Wachovia said in a filing. In addition, he can use an office and the services of an executive assistant for three years, and receive reimbursement for legal expenses of up to $50,000, the company said.

Losses to Wachovia in recent months include a $315 million after-tax charge announced in May tied to the declining value of its bank-owned life insurance policies. The company previously disclosed an $800 million to $1 billion charge because of tax-court rulings involving leasing transactions and a $144 million charge for failing to properly police telemarketers and payment processors.