WaMu and Credit Cards
It appears that losing billions of dollars on bad mortgage loans wasn’t enough for Washington Mutual. The large thrift has decided to jump head first in the subprime credit card business in an attempt that could be best described as essentially playing a double or nothing bet. According to an article by Ari Levy in Bloomberg, WaMu has increased their credit card business by 56% since acquiring Providian Financial Corp. WaMu stated in its annual report that it seeks customers who “are often underserved by large prime/superprime-oriented credit-card issuers and who satisfy its underwriting criteria”.
Moshe Orenbuch, an analyst at Credit Suisse Group in New York is quoted in the article saying, ‘Lower earnings in the credit-card business are going to compound their earnings issues.” Well Duh!
