Washington Mutual
Faces More Loan Losses,
Stifel Says
ELIZABETH CAMPBELL / Bloomberg News 12sep2008

Washington Mutual Inc.'s loan losses are rising and its consumer banking business is a concern, according to Stifel Nicolaus & Co.

Washington Mutual fell 10 percent to $2.54 at 3:37 p.m. in New York Stock Exchange composite trading.

"The biggest risk for WM is a run on deposits," Stifel analysts led by Chris Brendler wrote in a note to clients. "With all the negative headlines and recent IndyMac failure, WM's retail deposit franchise is a huge concern to us as a significant outflow of consumer deposits could lead to devastating liquidity problems since the company has apparently already lost access to the capital markets." WM is the company's stock ticker.

Brendler widened his third-quarter loss estimate for Seattle-based Washington Mutual, the biggest U.S. savings and loan, to $1.42 a share from the previous estimate of 77 cents.

Washington Mutual spokesman Brad Russell declined to comment on the report.

source: 13sep2008