Wamu Buys Great Western
Los Angeles lost a major home-grown financial institution in 1997 when Washington Mutual acquired Chatsworth-based savings and loan Great Western Financial Corp.
The deal, valued at nearly $8 billion, was another indication that L.A.-area banks and thrifts are a favorite takeover target for out-of-state giants looking to get a piece of the thriving local economy.
The takeover was particularly dramatic as Washington Mutual was bidding against Irwindale-based H.F. Ahmanson & Co., parent of Home Savings of America. Ahmanson made a hostile bid for Great Western early in the year, prompting Great Western management to call in Washington Mutual as a white knight.
After the deal became official on July 1, Washington Mutual announced plans to close up to 90 Great Western branches in California and Florida by the summer of 1998. More recently, it also said it plans to scrap the Great Western nameplate and replace it with Washington Mutual.
Great Western saw a net increase of 25,000 new checking accounts in the two months following the October announcement that, under the new leadership of Washington Mutual, it was introducing free checking to all customers.
Analysts are speculating that Washington Mutual could remain in acquisition mode in California for the next few years. They noted that small financial institutions make up around 50 percent of the state's banking and savings-and-loan market. Savings and loans account for around 40 percent of total deposits in California. As such, there are ample opportunities for further consolidation, particularly in Los Angeles, which has a preponderance of small institutions.
With Great Western gone, attention is now focusing on H.F. Ahmanson. With deposits of $39 billion, Ahmanson is by far the largest financial institution based in Los Angeles, and the third largest in the state. As such, it would make a handsome addition to a major national bank or savings and loan wanting to make a big splash in California.
For reprint and licensing requests for this article, CLICK HERE.