NEW YORK (Reuters) - Washington Mutual Inc (WM.N) shares fell as much as 9 percent on Friday after a published report said the largest U.S. savings and loan, which has been battered by mortgage losses, has approached private equity firms and sovereign wealth funds about possible cash infusions.
The Wall Street Journal, citing people familiar with the matter, said the Seattle-based thrift and other struggling lenders are seeking help.
It said regulators including the U.S. Federal Reserve and the Office of the Comptroller of the Currency are quietly pushing a handful of lenders to seek outside capital.
Libby Hutchinson, a spokeswoman for Washington Mutual, declined to comment.
Shares of Washington Mutual were down $1, or 8.5 percent, to $10.76 in afternoon trading on the New York Stock Exchange after trading as low as $10.67 earlier in the session.
If it were to seek an infusion to bolster capital, Washington Mutual would join Citigroup Inc (C.N), Merrill Lynch & Co MER.N and Morgan Stanley (MS.N) among financial services companies to do so in the last few months.
Washington Mutual lost $1.87 billion in the fourth quarter, hit by mortgage defaults, write-downs and a substantial increase in the amount it set aside for bad loans.
Chief Executive Kerry Killinger in a Jan. 17 interview said lenders face a period of “extreme stress,” and that credit costs would remain elevated for a while.
Washington Mutual this week disclosed that when it computes 2008 bonuses, it will shield Killinger and some other top executives from some costs related to the housing downturn.
It has said that management of credit costs will “unequivocally continue to be a major part of the (board of directors’) final deliberations.”
Reporting by Jonathan Stempel; Editing by Tim Dobbyn