Washington Mutual to Close 190 Offices
December 12th, 2007Via: San Francisco Chronicle:
Washington Mutual Inc., the nation’s largest savings and loan, said Monday that problems in the mortgage and credit markets are forcing it to close offices, lay off more than 3,000 workers and set aside up to $1.6 billion for loan losses in its fourth quarter.
Additionally, the company slashed its quarterly dividend 73 percent and said it plans a $2.5 billion offering of convertible preferred stock. Washington Mutual has not yet priced the offering, but increasing the total number of company shares will dilute their value for existing stockholders. In after-hours trading, shares fell $1.73, or nearly 9 percent, to $18.15 following the company’s announcement.
Chairman Kerry Killinger said in a statement that “significant expense reductions” were needed “to further fortify” the bank’s capital and liquidity.
The Seattle thrift dismantled much of its subprime mortgage business in September, cutting 1,000 jobs related to the sale of home loans to people with questionable credit. It folded the remaining subprime operations into its regular mortgage business.
The savings and loan will now get out of the subprime mortgage business entirely.
The company said it will close about 190 of its 335 home loan centers and sales offices, shut down nine call centers, and eliminate 2,600 home loan workers and 550 corporate and support jobs.
