What is Alan Fishman’s strategy for WaMu?

Don’t bother reviewing the transcript of the new WaMu CEO’s inaugural conference call yesterday with analysts. Three questions asked. Scant answers given.

Fishman, who replaced longtime WaMu CEO Kerry Killinger on Sunday, faces a daunting task. WaMu made bad loans, a lot of them. To be specific, WaMu has in its portfolio $53 billion in option adjustable-rate mortgages and $16.1 billion of subprime loans, according to Keefe, Bruyette & Woods Inc., an investment bank. Fishman’s strategic initiatives probably start and end with those two numbers.

But I did parse some inklings of strategy from Fishman’s comments yesterday. First, he sees WaMu sticking to retail and mortgage banking. WaMu was built on mortgage banking, yet it is mortgage banking that has gotten it into trouble (it was forced to sign a Memorandum of Understanding with the Office of Thrift Supervision on Sunday, too). Fishman said he sees retail and mortgage banking “evolving very rapidly over the next few years,” offering WaMu “a great opportunity.”

I suppose it is admirable that he is thinking about the future, but to not address in detail WaMu’s core capital crisis is surprising. An analyst asked Fishman about the bank’s capital situation and all he would say was “it looks like the plan makes good sense.” Deep.

Fishman clearly sees WaMu as possessing a strong retail brand and franchise. He sees the bank returning to profitability by leveraging that brand. If I were in his place, I would be more focused on the bank’s core risk management skills, rather than leveraging its brand. This is a bank that had zero concept of the true risks in subprime and alternative mortgage finance. To not make improving risk management a priority is a disservice to WaMu investors — and customers. Eventually, they’ll see the brand for what it is: a symbol of subprime decadence.

WaMu stock [WM] lost nearly 20% of value yesterday, closing at $4.12 per share.