National City lays off 900, cuts dividend

CLEVELAND, Jan. 2 (UPI) -- U.S. regional bank National City Corp. said Wednesday it would cut 900 jobs and halve its quarterly dividend, the first cut since the payout began in 1935.

The cuts -- shutting down its wholesale mortgage division and firing people who handle home loans through brokers -- sent shares of Ohio's biggest bank down 87 cents, or 5.29 percent, to close at $15.59. The shares were as high as $38.94 last year.

The layoffs bring National City's cuts tied to the subprime mortgage financial crisis to 3,400, or 10 percent of the staff.

The Cleveland bank said it would continue originating loans through its retail banking offices.

The 163-year-old bank said it planned to raise capital this quarter and hired Goldman Sachs Group Inc. as its capital adviser.

The dividend cut -- to 21 cents a share from 41 cents a share, payable Feb. 1 to shareholders of record Jan. 14 -- is needed to keep National City competitive, Chairman and Chief Executive Officer Peter Raskind said in a statement.

National City operates 1,400 bank branches primarily in Ohio, Illinois, Indiana, Kentucky, Michigan and Missouri.