Washington Mutual’s CEO Replaced After Three Quarters of Subprime Losses
The biggest U.S. savings and loan, Washington Mutua, has replaced Kerry Killinger as chief executive officer with Alan Fishman, 62, of the Meridian Capital Group, after Killinger failed to halt losses tied to home mortgages.
The company said it reached an accord with regulators about improving the lender's operations that doesn't include raising new capital.
Killinger's expansion into subprime mortgages contributed to $6.3 billion in losses in the past three quarters, and the stock lost 88 percent in 12 months. Soured home loans have claimed the jobs of bank CEOs including Citigroup Inc.'s Charles O. 'Chuck'' Prince, Wachovia Corp.'s Kennedy Thompson and Merrill Lynch & Co.'s Stan O'Neal, and yesterday the heads of mortgage companies Fannie Mae and Freddie Mac were replaced.
"We've been surprised that it hasn't come sooner,'' Patrick Becker Jr., chief investment officer at Becker Capital Management, said of Killinger's reported departure. "He was the architect who put this together. Clearly the foundation of it was not built to withstand the mortgage crisis.''
Published on September 8, 2008
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