Entries Tagged 'Washington Mutual' ↓
September 26th, 2008 — Bank Failure, Bank Run, Credit Crisis, Credit Crunch, Economy, WaMu, Washington Mutual
WaMu is now the 13th bank to fail so far this year and is the nation’s biggest bank failure on record, ahead of Continental Illinois, which had about $40 billion in assets when it failed during the early part of the 80s S&L crisis in May of 1984.
Washington Mutual was one of the most hard-hit banks during this financial crisis after it made money during the early part of the housing run-up, only to see its fortunes crash as housing prices fell.
Following several ratings agency downgrades earlier this week and a nosedive in the company’s stock, industry analysts had been speculating that the endgame for the embattled bank was imminent.
Those fears sent the thrift’s shares 25% lower in trading during the day on Thursday, and then down another 73% in after-hours following the announcement.
Four banks made bids for WaMu but JPMorgan Chase [[JPM]] won out when the auction was held. Several other institutions, including Wells Fargo [[WFC]], Citigroup [[C]]and HSBC [[HBC]] were also considering purchasing the bank.
September 26th, 2008 — Bank Failure, Bank Run, Banking, Chase, Credit Crisis, Economy, JP Morgan Chase, Mortgage Loans, Subprime Crisis, WaMu, Washington Mutual
In the largest bank failure in U.S. History, Washington Mutual crumbled last night, and was seized by federal regulators.
Under a deal brokered by the government, JPMorgan Chase [[JPM]] will acquire all the banking operations of WaMu, including $307 billion in assets and $188 billion in deposits.
WaMu’s assets were equal to about two-thirds of the book value of assets from almost 750 failed banks that were sold off during the previous S&L crisis that lasted from 1989 through 1995.
The acquisition of WaMu is JPMorgan Chase’s second major purchase this year. The first, of course, was its March acquisition of failed investment bank Bear Stearns, a deal that was also assembled by the government.
September 17th, 2008 — Banks, Chase, Credit Crunch, Economy, HSBC, Washington Mutual
The federal government has started cold-calling large banks, seeking to put together a deal for a buyout of Washington Mutual [[WM]].
The main roadblock to finding a suitable buyer has been that no one knows exactly what they’ll get into. The condition of WaMu’s books is a mystery.
The New York Post reported earlier today that banking regulators have been in talks with Wells Fargo [[WFC]], JPMorgan Chase [[JPM]], and HSBC, among others.
Shares of Washington Mutual have crashed in recent weeks as concerns mounted regarding losses in the bank’s lending portfolios. Shares of the Seattle-based thrift have fallen almost 50% over the past month and are off 83% for the entire year.
Over the last quarter, Washington Mutual lost over $3 billion, about $6.50 per share, as it put away more than $8 billion to cover bad loans in its mortgage holdings.