SEATTLE - Washington Mutual Inc.'s third-quarter profits slid nearly 9 percent, widely missing Wall Street's expectations, as the company continued broad cost-cutting efforts amid a slowdown in the home lending market.

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The nation's largest savings and loan said strong growth in retail banking fees was offset by a decline in mortgage revenues and home loan volume.

Net income in the company's retail banking division was $651 million, up 10 percent from third-quarter 2005, while the home loan unit suffered a net loss of $33 million, down 57 percent over the same period a year ago. Home loan volume for the quarter was down 34 percent.

"This is about the most difficult environment we've seen in the mortgage banking industry since the early to mid-90s," Steve Rotella, president and chief operating officer, said Wednesday in a conference call with analysts.

For the three months ended Sept. 30, Seattle-based Washington Mutual reported earnings of $748 million, or 77 cents per share, down from $821 million, or 92 cents per share, a year ago.

The results, released after markets closed for regular trading, included a $31 million after-tax charge from a previously announced sale of $2.53 billion in mortgage servicing rights to Wells Fargo & Co., plus a $33 million charge related to "ongoing efficiency initiatives" the company said would continue in the fourth quarter.

Excluding the two charges, Washington Mutual said its earnings would have been 84 cents a share.

Total quarterly revenue, a combination of net interest income and noninterest income, was $3.52 billion, compared with $3.29 billion in the same period last year.

Analysts polled by Thomson Financial were expecting earnings of 93 cents per share on revenue of $3.7 billion.

Shares of Washington Mutual fell 6 cents, or 0.14 percent, to close at $43.71 on the New York Stock Exchange on Wednesday, then slid an additional $1.70, or 3.9 percent, to $42.01 in extended trading. The stock has traded between $37.40 and $47.01 over the last year.

Washington Mutual has cut several thousand jobs this year as part of a broad restructuring plan, reducing its total work force by 16 percent to about 51,000 employees. Cost-cutting efforts have included moving about 3,700 jobs offshore and relocating some backoffice operations to less expensive parts of the country.

Despite a tough interest-rate environment and other challenges, Kerry Killinger, Washington Mutual's chairman and chief executive officer, said he's confident the company is poised for growth.

"2006 is a transition period for the company, setting the stage for a much stronger performance in the future," Killinger said. "During this period, the management team has worked diligently to make the tough decisions that will drive productivity while lowering costs and improving service levels. This is hard work, and I'm proud of what we've accomplished."

Killinger said the company is pleased with the performance of its new credit card division, created after the acquisition of Providian Financial Corp. last year. That unit reported net income of $210 million for the quarter, driven by the opening of 815,000 new accounts.

More than 307,000 new checking accounts were opened during the quarter, up 21 percent from third-quarter 2005. The company said more than 1 million new checking accounts had been opened so far this year, up 50 percent from the same period last year.

Total loan volume in the company's commercial group, which includes multifamily and nonresidential commercial property lending, grew 3 percent from third-quarter 2005 to $3.10 billion.