WaMu on auction block, Goldman hired on for sale as FDIC shops bank around

September 17, 2008 by · Leave a Comment
Filed under: Industry News 

Well is has been rumored for some time now. With Goldman Sachs hired on with assistance of the FDIC to find a suitor for the nations largest deposit savings bank. The Texas Pacific Group has giving their blessing for a sale after investing $1.5 billion dollars into Washington Mutual in April of 2008.

I have heard estimates that they have $19.5 billion dollars of mortgages on their books with many of them being Option-ARM which are resetting to payments the borrowers can not afford. At the time of this writing, WaMu has a market capitalization of $3.43 billion dollars that make this a difficult situation with no silver linings. This is sad because I personally use WaMu for one of my accounts and I do like their customer service.

Article:

Washington Mutual appeared closer to finding a new owner Wednesday. The Seattle bank hired Goldman Sachs to explore a possible sale, while news reports said federal regulators recently approached Wells Fargo, J.P. Morgan Chase, and others about a possible buyout should WaMu fail.

Goldman reportedly has been shopping the bank around for several days and has approached Wells Fargo, HSBC, Citigroup and J.P. Morgan Chase, among others, about a possible deal.

WaMu has lost more than 90 percent of its stock-market value over the past year, and some analysts don’t expect the bank to turn a profit until mid-2010 — an eternity in today’s environment.

WaMu’s large deposit base and extensive branch network in key growth markets such as Florida and California would be appealing to a potential suitor such as Chase. San Francisco bankers, for instance, have long said it’s only a matter of time before the New York bank operates branches in the Golden State.

Merrill Lynch analyst Kenneth Bruce issued a report Wednesday saying that WaMu is coming under increasing pressure to “seek shelter from the storm through a merger.

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