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Analyst: WaMu could avoid raising more capital

By Riley McDermid
Last update: 8:17 a.m. EDT June 25, 2008Comments: 1
NEW YORK (MarketWatch) - Ladenburg Thalmann bank analyst Dick Bove on Wednesday said Washington Mutual Inc. (WM:Washington Mutual Inc
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Last: 6.00+0.20+3.45%

9:37am 06/25/2008


WM 6.00, +0.20, +3.5%) may be able to bear $36 billion in losses and still remain in business without raising capital. Bove said the $10 billion in new funds raised by the bank since December could cover $15 in pretax losses, while the $4 billion the bank has in reserves could cover an additional $19 billion of losses. "I estimate that over the next three years, the thrift will generate $17 million in pretax, pre-provision earnings, " Bove wrote in a research note, which could leave the thrift well-positioned to weather possible capital trouble. Bove trimmed his 2008 earnings per share estimate for WaMu to a loss of $3.03 from previous estimate of a loss of $3.61. WaMu shareholders on Tuesday approved two proposals related to its recent $7 billion cash infusion