Industry News

WaMu beats ’05 profits despite reversal in mortgage lending

Home loans unit goes from breadwinner to money-loser in '06

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It's like night and day: Washington Mutual Inc.'s home loans unit generated $1.03 billion in profit in 2005, and lost $48 million in 2006, the bank said in reporting fourth-quarter earnings. But solid performance in retail and commercial banking and credit card services helped WaMu boost profits from 2005. At $1.06 billion, or $1.10 per share, profits for the fourth quarter of 2006 were up 22.5 percent from the year before, when WaMu posted net income of $865 million, or 85 cents per share. Profits for the year totaled $3.56 billion, or $3.64 per share, up 4 percent from 2005 net income of $3.43 billion, or $3.73 per share. That's thanks in part to a $415 million gain from the sale of WM Advisors Inc., WaMu's mutual fund asset-management company, and solid performance in retail banking, credit card services and commercial business banking, the company said. WaMu focused on expanding its consumer and small business banking business in 2006, while simultaneously cutting costs by she...