Washington Mutual’s profit drops 20 percent

SEATTLE – Washington Mutual Inc. said Tuesday its first-quarter profits slid 20 percent amid a nationwide implosion of the subprime home loan market.

The Seattle-based company, the nation’s largest savings and loan, said its net income was $784 million, or 86 cents a share, for the three months ended March 31, down from $985 million, or 98 cents per share, in the same period a year ago.

Revenue in the January-March period, including net interest income and noninterest income, was $3.62 billion, up from $3.59 billion in the same period last year.

Analysts polled by Thomson Financial were predicting earnings of 83 cents on $3.6 billion in revenue.

Kerry Killinger, Washington Mutual’s chairman and chief executive, said the company’s retail banking, card services and commercial groups fared well, while the home loan market – particularly the subprime segment for consumers with high-risk credit histories – remained a serious challenge.

“Over the past 12 months, we have taken a number of prudent actions to reduce our exposure to the subprime mortgage industry,” Killinger said in a statement. “These actions, along with a diversified business mix, limited our exposure to the mortgage market’s downturn and position us well to expand and grow as market conditions improve.”