Collateral Damage – Weak Real Estate Market & Mortgage Meltdown
The Arizona Republic
Apr. 11, 2007 01:04 PM
One of Arizona’s largest banks is laying off 212 people, including 53 in Arizona, as a result of continuing weakness in the mortgage market.
Scottsdale-based 1st National Bank Holding Co., parent of 1st National Bank of Arizona blamed the move on tighter credit standards for borrowers and higher downpayment requirements.
“We’re not a subprime lender, but it has splashed over,” said Gary Dorris, president and chief executive officer of the privately owned institution, which still counts roughly 2,000 employees, including 1,300 in Arizona.
“The industry has raised its expectations for what a borrower’s (credit score) should be before extending mortgages.”
Dorris said 1st National Bank originates mortgages nationally and sells them to investors who have become increasingly wary of subprime borrowers amid a downturn in that market and the collapse of firms focusing on the credit-strapped end of the business.
The Scottsdale company is offering severance packages for the people losing jobs, including loan processors and supervisors, most of whom worked in Tempe. Some 1st National Bank employees in California, Virginia and North Carolina also lost their jobs.
The bank has about 70 openings in Arizona for non-mortgage jobs, and some laid-off individuals might land positions elsewhere in the firm, Dorris said. The openings are for processors of commercial and construction loans, bank tellers and other positions.
The company also has implemented labor-saving technology in its mortgage division that will decrease the need for future manpower there.
In terms of statewide deposits, 1st National Bank of Arizona ranks No. 8, according to the Federal Deposit Insurance Corp.
Citigroup to Cut 17,000 Jobs
Wednesday April 11, 1:00 pm ET
By Eileen Alt Powell, AP Business Writer
Citigroup to Eliminate 17,000 Jobs As Part of Cost-Saving Restructuring
NEW YORK (AP) – Citigroup Inc., the nation’s largest financial institution, said Wednesday it will eliminate about 17,000 jobs as part of a company wide restructuring to reduce costs and improve profit.
That amounts to about 5 percent of the bank’s 327,000-strong work force. Citigroup said its plans include “shrinking the size of corporate centers,” several of which are in New York. It also expects to move some 9,500 jobs to lower-cost locations.