Washington Mutual

  • 02 Jun 2008 at 5:24 PM
  • Banks

Is Washington Mutual’s CEO Next?

This morning we asked whether the firing of Ken Thompson would lead to a new bloodbath at the top of our financial institutions. A few hours later Washington Mutual took away the chief executive Kerry Killinger post as chairman of the company’s board. Killinger has been running as a close second to Thompson as the most despised chief executive running a bank. There’ve been many calls for his head upon a platter. So how long has he got?
Felix Salmon reminds us that there were just 24 days between Thompson losing his chairmanship of Wachovia and his firing.
“At that rate, Kerry Killinger … is likely to be fired on June 26. Mark your calendars!” Salmon writes.

Whither WaMu’s Killinger?
[Portfolio]

So JPM is looking to buy a “super-regional” bank, possibly WaMu. This idea is either terrible or brilliant. Jamie Dimon is supposed to be one shrewd operator. If that’s true then WaMu may be perfect for him.
“WaMu is one craptastic sorry ass cobbled together turd pie,” we were told by our computer screen as we typed those words. We don’t know if we are the only one who remembers this article from Fortune in ’04. But the guys at WaMu couldn’t find their ass with both hands, and google maps.
So there’s an opportunity for a shrewd business man to take it over and really improve things. And, Jamie, son!, you really know your deal making, having served under THE master for all those years. But is WaMu too much of a shit show, to even be worth the time? According to the aforementioned Fortune article:
“In a half-dozen years it purchased no fewer than ten major lenders coast to coast, from Great Western in California to Dime Bancorp in New York” and “WaMu still uses an amazing nine separate systems to originate loans, including one called LoanWorks that it has employed since its days as a small thrift and others that it picked up from acquisitions. The systems have great trouble talking to one another. According to former executives, the Tower of Babel situation drove up costs and led to long delays in closing mortgages this year and last, allowing competitors to poach loads of business.”
If you can pull this off, it’ll rival what Sandy did at Corn Beef With Lettuce cleaning out the back office operations of whatever ancient white shoe firm it was he bought way back before we were born.
–Everett Stuckey, DealBreaker correspondent.