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WaMu expected to oust its CEO

September 08, 2008|From Bloomberg News

Washington Mutual Inc. plans to oust Kerry Killinger as chief executive after 18 years and replace him with Alan Fishman of Meridian Capital Group, the Wall Street Journal reported, citing people familiar with the matter.

Fishman was chief operating officer at Philadelphia-based Sovereign Bank before becoming chairman of Meridian, a New York commercial mortgage broker, the Journal said. Sovereign Bancorp is the second-biggest U.S. savings and loan after Seattle-based Washington Mutual, known as WaMu.

An announcement is expected today before financial markets open, the newspaper said.

Washington Mutual spokesmen Brad Russell and Derek Aney didn't return calls for comment.

Killinger, 59, already had stepped down as chairman in June after investors voted to remove him. The stock has tumbled 88% in 12 months. Losses tied to home loans have claimed the jobs of other banking chief executives, including Citigroup Inc.'s Charles O. "Chuck" Prince, Wachovia Corp.'s Kennedy Thompson and Merrill Lynch & Co.'s Stan O'Neal. Fannie Mae's Daniel Mudd and Freddie Mac's Richard Syron were replaced Sunday after the U.S. seized control of the two mortgage companies.

David Dreman, ranked among WaMu's 10 biggest shareholders, called for Killinger's ouster in June, saying the CEO must be held accountable for $3 billion in subprime-related losses.

The following month, WaMu reported a $3.3-billion second-quarter loss as more borrowers fell behind on mortgage payments.

Analysts began speculating that WaMu would need to raise more capital on top of the $7 billion collected in April from a group led by David Bonderman's TPG Inc.

TPG spokesman Owen Blicksilver declined to comment Sunday.

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