WaMu poised for $5bn injection

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Shares in Washington Mutual, the largest savings and loan group in the US, rose sharply on Monday as a group of investors led by private equity group TPG prepared to invest more than $5bn in the company.

The move, expected to be announced as early as Tuesday, is the latest re-capitalisation in the financial services industry as banks and lenders see their capital eroded by big losses from the mortgage crisis.

WaMu shares, which had fallen by about 80 per cent in the year to last Friday, on Monday rose by more than 25 per cent on reports of the deal.

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