National City Corp will stop offering mortgages through brokers. Photo / Bloomberg
National City Corp will stop offering mortgages through brokers. Photo / Bloomberg
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NEW YORK - National City Corp, one of the 10 largest US banks, said it will cut its common stock dividend 49 per cent and eliminate 900 jobs as it stops offering mortgages through brokers.
The company also said it planned to raise more capital to help itcope with deteriorating credit markets, and hired Goldman Sachs as an adviser.
Chief executive Peter Raskind said National City needed to take "aggressive steps" to cope with disruptions in the mortgage, housing and credit markets.
Cleveland-based National City operates about 1445 branches, mainly in US Midwest states.
It has significant operations in Florida, Ohio and Michigan, which ranked second, third and fifth nationwide in foreclosures in November, according to RealtyTrac.
The higher dividend had equated to a 10 per cent yield. National City joined Washington Mutual and IndyMac Bancorp among large mortgage lenders to lower their dividends in the last two months.
Freddie Mac, the second-largest US mortgage finance company, also cut its dividend.
National City's latest job cuts affect about one-seventh of its mortgage staff, which totalled 6274 in November. The bank employed 32,804 people overall.
The cuts are in addition to 2500 jobs that National City eliminated in last year's second half, as it merged its home equity and mortgage lending units, and stopped making many kinds of home loans.
