|The company which touts itself as "the largest direct lender on the Internet" received approval from the Federal Reserve Board to become a bank and financial holding company. In an announcement today, Countrywide Credit Industries, Inc. (NYSE: CCR) Chief Executive Officer Angelo R. Mozilo said "This approval brings us closer to the realization of our diversification strategies."
The approval clears the way to finalize the acquisition of Treasury Bank, Ltd., by Countrywide's majority-owned affiliate, Effinity Financial Corporation of Alexandria, Virginia. Mr. Mozilo said that the company can now move forward with plans to further diversify the mortgage giant's product offerings, implement Internet banking strategies and "enhance relationships and retention rates with our existing base of nearly 3 million mortgage customers and 500,000 insurance customers."
Stanford L. Kurland, Chief Operating Officer and Executive Managing Director added, "As a bank and financial holding company, Countrywide will be able to capitalize on our strengths to offer new and existing customers a powerful suite of banking products." He continued "This change in status also enables us to leverage two of our most important core competencies; asset origination capability and processing expertise."
Countrywide's move to become a bank follows a similar move by IndyMac. Last year, Countrywide was rumored to have hired Goldman Sachs to line up potential buyers for the company because of frustration over its inability to maintain the leverage ratios that a commercial bank could maintain. Washington Mutual was said to be a possible suitor.
The Calabasas, California company this week reported record loan production during March.
Shares of Countrywide were trading at $45.20 per share this morning, down twenty seven cents.