ABC News' Alice Gomstyn reports: The time has come: WaMu is fighting back.
When I was working on a story Wednesday about analysts questioning whether the housing crisis would sink Washington Mutual, the bank stayed mum. But by Thursday evening, it had issued not one but two statements defending its financial health.
The first was a forecast for the bank’s third-quarter performance. The bank said that it expects to write off less in bad loans this quarter than in the quarter before -- $4.5 billion vs. $5.9 billion.
That might be cold comfort to some, but the bank also said that, despite the expected write-offs, it “continues to be confident that it has sufficient liquidity and capital to support its operations while it returns to profitability.”
WaMu’s second statement, issued about two hours later, disputed the decision by the credit rating agency Moody’s to lower the bank’s investment grading.
The bank called Moody’s move “inconsistent with the company’s current financial condition.”
“The action by Moody’s appears to reflect the current uncertainty in the markets, rather than a thorough evaluation of Washington Mutual’s business, the strength of its national franchise and the steps it is taking to return to profitability,” the bank said.
WaMu, no doubt, is attempting to quell the perception that it's yet another financial firm headed for a meltdown, but it’s unclear how effective its efforts will be. Fred Cannon, an analyst with Keefe, Bruyette & Woods Inc., suggested to The Wall Street Journal that the efforts could backfire.
"By needing to make the statement,” he said, “it underscores a lot of the concerns.”