Magazine article American Banker

Wash. Mutual Faces Big-League Challenges in California

Magazine article American Banker

Wash. Mutual Faces Big-League Challenges in California

Article excerpt

Washington Mutual Inc.'s planned acquisition of American Savings Bank would bring together two of the thrift industry's most aggressive brokerage programs, creating another large competitor in the increasingly cutthroat California market.

The deal, which is expected to close this year, would increased Washington Mutual's brokerage and insurance sales force to 420 licensed employees. The Seattle-based thrift would be able to market its well respected proprietary mutual funds and annuities to consumers in seven states, including American Savings' home market of California.

"This has the makings of a powerful combination," said Andrew Singer, president of Bank Insurance Marketing Research Group in Mamaronek, N.Y.

Washington Mutual has its work cut out for it. The West is already home to some of the most aggressive bank purveyors of investment products, including BankAmerica Corp. and Wells Fargo & Co. In addition, executives at the new Washington Mutual would have to figure out how to mesh two brokerage units with different cultures.

The $22 billion-asset Washington Mutual, for example, focuses on marketing its own $1.3 billion-asset mutual fund family. It was one of the first banks to have its own mutual funds, thanks to its 1982 acquisition of Composite Research and Management Co., Spokane, Wash. Observers also note that the company's current chairman, Kerry Killinger, was chief financial officer at Murphy Favre Inc., a brokerage firm that the company acquired at the same time.

The thrift has also developed proprietary fixed and variable annuities. "Anything progressive you can do in this area, they've done," said Mr. …

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