Washington Mutual Sees Profit Down 75%
Washington Mutual, one of the largest U.S. mortgage lenders, said Friday it expects a 75 percent drop in third-quarter net income because of adverse housing market and credit conditions.
The bank, whose shares fell 2.2 percent in premarket trading, said its loan loss provision for the quarter will be $975 million. It also expects $150 million in losses in its trading securities portfolio.
Only days ago, Citigroup, the largest U.S. bank by market value, said it was expecting a 60 percent fall in third-quarter earnings on $5.9 billion in losses and write-downs from subprime and leveraged loans, fixed income trading, and weakness in its consumer business.
"We're disappointed with our anticipated third-quarter results," Chief Executive Kerry Killinger said in a statement.
But he added the company expects an improved fourth quarter on good performance in its retail banking, card services and commercial group businesses.
Killinger said the bank has the liquidity and capital necessary to develop its businesses and support its current dividend.
Washington Mutual , the largest U.S. savings and loan bank, said last month it was laying off 1,000 employees as it copes with weak housing demand.