Depressing that it took this long, but Washington Mutual (WM) finally dumped man who drove it onto the rocks, CEO Kerry Killinger. Like others in the parade of CEOs tossed out the door, Killinger set WaMu up for disaster, and he has to be held responsible for that.
The move won’t resurrect the company’s stock, of course (more trouble likely on that horizon), but it should reassure employees and shareholders that there’s at least some accountability at the company.
WSJ: Killinger transformed the Northwestern thrift into a national giant in mortgage lending and consumer banking via a string of mergers in the 1990s. But he also made some costly mistakes with the company’s mortgage-hedging operation that undercut profits during a mortgage boom, pursued an aggressive retail expansion marred by poor locations in too many markets and steered the company into the subprime market only to be hit by poor underwriting and sinking home values in key geographic areas such as California. Investors were hard on the company amid weaknesses in the economy and repeated questions about WaMu’s capital cushion and further losses. The thrift dealt with this year’s mortgage meltdown by laying off thousands of employees, closing mortgage centres and cutting its dividend but Killinger admitted mortgage-related losses could total $12 billion to $19 billion this year.
Succeeding Killinger will be Alan Fishman, currently chairman of New York commercial mortgage broker Meridian Capital Group, according to several people familiar with the situation. Before joining Meridian in 2007, Fishman was president and chief operating officer of Philadelphia-based Sovereign Bank, the nation’s second-largest thrift, and chief executive officer of New York-based Independence Community Bank, which Sovereign Bank’s parent acquired for $3.6 billion in June 2006. Fishman quit Sovereign in December 2006 after he was not made chief executive of the parent, Sovereign Bancorp Inc.
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