WaMu Says It's Well-Capitalized as Shares Plunge

Washington Mutualsaid it is "wellcapitalized" with more than $40 billion of liquidity and $150 billion of retaildeposits, moving to reassure investors and depositors after shares of thelargest U.S. savings and loan sank 34.7 percent on Monday.


The thrift said it would provide further details on its financial health andsteps it is taking to work through the market environment when it reportssecond-quarter results on July 22.

Analysts on average expect a second-quarter loss of 93 cents per share,according to Reuters Estimates. This would be the third straight quarterly loss.

Shares in major U.S. banks plunged on Monday as fears about the sector'sstability mounted following Friday's seizure by regulators of IndyMac BancorpInc .

The decline in Washington Mutual shares also came after Lehman Brothers Incanalyst Bruce Harting wrote that the savings and loan could face $26 billion oflosses, including $21 billion for mortgages.

Harting wrote that Washington Mutual , based in Seattle, would be unprofitable until credit costs normalize, around the second half of 2009.

He also wrote that write-downs on bad loans could force the thrift to set aside$4 billion in the second quarter, resulting in a $1.48 per share loss.

Washington Mutual said in its statement that it recently raised $7.2 billion ofcapital and had a 7.8 percent ratio of tangible equity to total tangible assetsas of June 30.

The thrift also said it significantly exceeded regulatory minimums for capital.

Shares of Washington Mutual closed down $1.72 at $3.23 on the New York StockExchange, but rose to $3.56 in after-hours trading after the thrift's statement.

The shares' 52-week high is $42.93, set last July 16.