Trading Lifts Washington Mutual

The home lender's earnings jump 73% in the second quarter.
Author:
Publish date:

Washington Mutual

(WM) - Get Report

, the nation's largest thrift, reported a 73% gain in second-quarter profits, suggesting the lender's reorganization of its home mortgage business is taking hold.

In the quarter, WaMu earned $844 million, or 95 cents a share, compared with $489 million, or 55 cents a share, in the year-earlier period. The thrift blew past the Thomson Financial consensus estimate of 83 cents.

Net interest income rose 7% to $1.93 billion. Noninterest income rose 41% to $1.26 billion. Much of the gain in noninterest income can be attributed to a $285 million increase in securities trading income.

WaMu, one of the nation's largest mortgage bankers, reported that home lending volume rose in the second quarter compared with the first quarter of this year. That's an indication the mortgage market remains robust despite the

Federal Reserve's

continued ratcheting up of short-term interest rates.

WaMu suffered through several dismal quarters last year because of problems with the hedging strategy the bank employs to protect itself from interest rate fluctuations. WaMu responded to those lean quarters by moving aggressively to cut costs by eliminating thousands of jobs and closing call centers.