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National City to cut 4,000 jobs. Earnings down at Fifth Third and KeyCorp
By Linda Shen
and Doug Alexander
Bloomberg News
Published on Wednesday, Oct 22, 2008
National City Corp., Fifth Third Bancorp and KeyCorp, Ohio's largest banks, Tuesday reported third-quarter losses amid the worst housing slump since the Great Depression.
National City will cut about 4,000 jobs, or 14 percent of its work force, over the next three years after posting a net loss of $729 million, or 85 cents a share, the Cleveland-based company said in a statement.
The cuts will be ''spread over the market,'' but specific details are not available yet, National City spokeswoman Kelly Wagner Amen said. The staffing reduction is expected to take place over a three-year period.
National City has 24 branches with about 300 employees in Summit County.
Fifth Third in Cincinnati reported a quarterly loss of $56 million, or 61 cents, and Cleveland-based KeyCorp's loss was $36 million, or 10 cents.
The earnings are ''not terribly surprising, it just shows that you have a group of banks that are not only in a recessionary environment, generally speaking, and also in a geography that's in secular decline,'' said Sterne, Agee & Leach Inc. analyst Sean Ryan. ''The reality is if you're making loans in Ohio there's not a lot of places to hide.''
The losses add to pressure on the managements of National City, Fifth Third and KeyCorp after shares of the companies fell more than 50 percent this year. National City Chief Executive Officer Peter Raskind said in the statement that the bank was hurt by ''extraordinary disruptions'' in the financial markets.
''As our results indicate, we aren't immune to disruptions in the capital markets and weakening economic conditions,'' Fifth Third CEO Kevin Kabat said in a statement. ''Higher credit costs once again drove bottom-line results.''
Raskind and Kabat pointed to signs of improvement at National City and Fifth Third. Raskind said National City is gaining market share and has ''strong capital,'' while Kabat said Fifth Third's ''core earnings power'' remains positive.
National City, the biggest of the Ohio banks, reported its fifth straight quarterly loss. After preferred dividends, the third-quarter loss was $5.1 billion, or $5.86 a share. The company raised $7 billion in April, giving Raskind financial leeway to contain losses from subprime mortgages and loans tied to home equity, construction and cars.
National City expects another $2 billion to $2.2 billion in costs tied to the liquidations, the bank said in a presentation on its Web site. The lender's provision for loan losses in the third quarter more than tripled to $1.18 billion.
National City Corp., Fifth Third Bancorp and KeyCorp, Ohio's largest banks, Tuesday reported third-quarter losses amid the worst housing slump since the Great Depression.
Get the full article here.
Comments
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Orrville, Oh
Posted 03:26 PM, 10/22/2008
Ohio largest banks benefiting from abolishing 4000 jobs and foreclosing on defaulted mortgages, insecure loans, and credit cards that adds to bank assets. Supports the demise of Natural Law, God, democracy, capitalism, the US Constitution, and free, fair, and affordable commerce. Makes free, fair, and affordable commerce IMPOSSIBLE, Makes balancing every budget IMPOSSIBLE. Makes funding schools IMPOSSIBLE. Makes union workers, consumers, taxpayers, and America’s grandchildren’s children LIFE UNAFFORDABLE. And created the $40 trillion social security and the $9.3 trillion national debt. America’s grandchildren’s children are responsible to pay interest with until they are 18 years old.
Then pay the debt with the $6.85 per hour labor wage. Twenty five percent of We the stupid, defiant of demands of natural law (what Mother Nature, God, or Whatever Power decreed to be the reality of the real world) God, democracy, capitalism, the US Constitution, and free, fair, and affordable commerce. Deceived in Sunday schools, public schools, private schools, and home schools, colleges, and universities government of the people, by the people, for the people, elected legislators and representatives to enact.
There is no reason to believe America’s grandchildren’s children that go to bed hungry can afford life and pay this debt with money derived from wages or independent business profit in a hundred million years.
Akron, Oh
Posted 09:01 PM, 10/22/2008
So their stock price went down. That is how they lost their money? Its not as if everyone just up and decided to stop paying their bills. The banks package up these little loans for wall street and now the little packages, that were b.s. in the first place, that noone bothered to check on because they were making money, crumbled. I blame the mortgage companies, the appraisers, and the banks. Now people lose their job because the banks got greedy and lied. go figure.
