Washington Mutual Reports $3.3 billion Loss, But Active Credit Card Business

Seattle-based thrift Washington Mutual (NYSE: WM) said Tuesday that it lost $3.33 billion in the second quarter of 2008 amid troubles in its mortgage business and a massive program to build capital.

The loss amounted to $6.58 per share. In the second quarter of 2007, the bank reported net income of $830 million, or 92 cents a share.

WaMu said that a large portion of the loss was attributable to a $7 billion capital infusion announced in April. The one-time charge amounted to $3.24 per share, with WaMu saying the per-share loss would have been only $3.34 without the infusion charge.

Still, analysts had expected a loss of a little more than $1 per share.

The bank reported that its Card Services unit lost $175 million in the quarter compared to net earnings of $199 million in the first quarter and $133 million in the second quarter of 2007. Provision for loan losses was to blame as WaMu put away $911 million to cover losses in its card unit, compared to $626 million last quarter.

The card unit did say, however, that it opened 755,301 new credit card accounts in the quarter. About 35 percent of the accounts came from the bank’s retail channel.

The 30+ day delinquency rate in the card unit also increased, rising to 7.05 percent from 6.89 percent in the first quarter and 5.11 percent in the second quarter of 2007. WaMu classified the delinquency rate as “stabilizing” as the growth in the rate has slowed.