WaMu loves the Internet
No. 1 thrift will rely more on its online banking arm to grow its retail banking business.
By Shaheen Pasha, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- With the housing market in a slump and interest rates on the rise, Washington Mutual's looking to the Internet to help grow its retail banking business

The nation's biggest savings and loan, long known for its aggressive branch-building strategy, is singing the praises of its online banking arm and plans to rely more on cyberspace to win new customer accounts, Washington Mutual (Charts) CEO Kerry Killinger said at its investor day conference in Seattle Thursday.

Killinger said the Seattle-based company is adding more than 700 checking accounts a day and hopes to grow over $1 million new checking accounts a year.

"The Internet is giving us more flexibility," he said. "It's taking off the heat of opening many more stores."

In fact, Killinger said the company, which originally planned to open 150 to 250 branches by the end of the year, expects to come in at the low end of that estimate.

Despite the projected store openings, Washington Mutual - which is now shortening its moniker to WaMu - is still on track to close 35 branches in Atlanta and 28 in Chicago, executives said, in a bid to cut costs and improve efficiency.

The company's focus on retail banking, which now accounts for about two-thirds of its profit, is a strategic move to cushion itself from the downturn in the housing market.

Killinger said he expects the housing market to be soft for some time, which will lead to higher delinquencies and credit costs for the company.

To offset some of the financial concerns, WaMu said that it would exit non-core or lower-performing businesses. The company announced plans in July to sell its rights to service about $140 billion of mortgages to San Francisco-based Wells Fargo - a move that lowered its risk profile, Killinger said.

He added that the company remains committed to cost-cutting. In the second quarter, the company cut 4,000 jobs, or 7 percent of its work force, and it announced another 900 cuts in July.

Steve Rotella, WaMu's president and chief operating officer, said the company has continued to open new branches even as it reduced retail banking staff by 4 percent in recent months.

To further reduce costs, he said the company will move more of its back office operations to lower-cost domestic locations such as San Antonio, Texas, and Jacksonville, Fla.

He said the company will also boost the number of jobs offshore to 7,500 by the end of next year.

------------------------------------------------------

YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.