WaMu Chairman and CEO Kerry Killinger said, â€œWhile we're disappointed with our anticipated third-quarter results, we look forward to an improved fourth quarter as we continue to see good operating performance in our Retail Banking, Card Services and Commercial Group businesses.â€? Killinger added that the company continues to have the liquidity and capital necessary to grow the company's businesses and support its current dividend, as it continues to execute its long-term strategic plans.Only a few days back, Citigroup also said it was expecting losses in the third quarter, warning that profit at the nation's largest bank could fall as much as 60 percent.
WaMu Warns on Mortgage Hit; Says Income Will Drop 75 Percent in Third Quarter
Washington Mutual, Inc. (NYSE:WM) announced today that a weakening housing market and disruptions in the secondary market through the end of the third quarter will result in a decline in net income of approximately 75 percent from the prior year quarter. The Seattle-based bank said that it expects write-down $150 million in held-for-sale mortgage loans, as well as absorbing $110 million on MBS holdings. WaMu also expects to take a net loss of $150 million in the company's trading securities portfolio, and will increase loan loss reserves to $975 million -- reflecting what it said in a statement was "ongoing weakness in the housing market, primarily as it affects subprime and home equity loans." From the press statement: