Business

National City to cut jobs by 14%

NEW YORK — National City Corp. on Tuesday reported a third-quarter loss and said it will cut 4,000 jobs, as the regional bank continues to struggle amid the ongoing downturn in the mortgage and credit markets.

Terri Wilson, National City's spokeswoman in Louisville, said it's not known how many of the bank's 1,300 Kentucky employees will lose their jobs.

The reductions will be based on types of jobs, not on geographic locations, so the number for each state National City serves is unclear, she said.

National City is the largest bank in Kentucky in terms of deposits. It has locations in Lexington, Louisville and other cities, but most of its Kentucky employees — 940 — are in Louisville.

Cutting 4,000 positions would be about 14 percent of its total work force. The bank is trying to reduce costs between $500 million and $600 million by 2011. National City said it expects to realize $240 million in savings, and $80 million to $100 million in associated charges in 2009.

Recent reports suggested National City could be considering a sale or merger of the bank, though Chief Executive Peter Raskind declined to comment on the speculation. Multiple banks, including Wachovia Corp. and Sovereign Bancorp Inc., have agreed to be acquired over the past month amid the ongoing mortgage and credit crisis.

Problems in the mortgage and real estate markets since the middle of 2007 have hit National City especially hard.

National City's net loss available to common shareholders was $5.15 billion, or $5.86 per share, during the third quarter. The bank lost $19 million, or 3 cents per share, during the same period last year.

The Cleveland-based bank recorded a one-time dividend of $4.42 billion on preferred shares issued in April related to its $7 billion capital raise, nearly all of which was a non-cash charge. Excluding the preferred dividend, the quarterly loss was $729 million, or 85 cents per share. The dividend had no impact on cash, total capital or net income, the bank said.

Analysts polled by Thomson Reuters, on average, had forecast a loss of 31 cents per share for the quarter. Analysts typically do not include charges in their estimates.

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