* National City has fifth straight loss
* Bank to cut 4,000 jobs
* Loan loss provision triples
NEW YORK National City Corp NCC.N, the U.S.
Midwest regional bank, posted its fifth straight quarterly loss
on Tuesday, hurt by increased reserves for mortgage and real
estate construction loan losses.
The Cleveland-based lender also plans to reduce 4,000 jobs,
or 14 percent of its workforce, over three years to save $500
million to $600 million annually by 2011.
National City's third-quarter net loss was $729 million, or
$5.86 per share, and compared with a loss of $19 million, or 3
cents, a year earlier.
Results reflected a $4.4 billion preferred dividend paid in
September as part of a $7 billion capital raising completed in
April from Corsair Capital LLC and other investors. After
accounting for the preferred stock, its loss would have been 37
cents a share, the bank said.
Analysts on average expected a loss of 37 cents per share,
according to Reuters Estimates. It was not immediately clear on
what basis analysts computed their forecasts.
National City set aside $1.18 billion for loan losses, up
from $368 million a year earlier but down from $1.59 billion in
the second quarter.
A majority of the increased reserve was tied to a $21
billion portfolio of businesses that the bank is exiting,
including broker-sold home equity, subprime and residential
construction loans, and automobile, marine and recreational
vehicle loans made through dealers. The portfolio was $17
billion three months earlier.
The bank ended September with a Tier 1 capital ratio, which
measures its ability to cover losses, of 10.98 percent.
Regulators say 6 percent reflects a "well-capitalized" bank.
Investors have pummeled the bank's shares, which fell as
low as $1.25 on Sept 29, amid concern that mounting loan losses
might cause National City to run short of capital, and perhaps
The bank said average core deposits fell $1.3 billion from
the second quarter to $83.3 billion, in part because customers
withdrew some balances in excess of FDIC insurance limits
National City has been burdened with lower-quality
mortgages it kept when it sold its First Franklin Financial
Corp subprime business to Merrill Lynch & Co MER.N in 2006.
It has also been hurt by its acquisitions in 2006 and early
2007 of two Florida banks.
The bank has repeatedly said in recent weeks that it has
enough capital to make it through the current credit cycle,
without doing fire sales of any assets.
National City shares closed Monday at $2.92 on the New York
Stock Exchange. The shares have fallen 82 percent this year,
compared with a 35 percent drop in the KBW Bank Index .BKX.
(Reporting by Jonathan Stempel; Editing by Derek Caney)