National City ( NCC) was one of the financial sector's most notable losers Wednesday as the Cleveland bank set plans to slice its dividend nearly in half and close its wholesale-mortgage division. The company's shares fell 4.3% to $15.75 on word its quarterly payout would be cut to 21 cents a share from 41 cents. "Today's environment requires aggressive steps to overcome the near-term challenges facing the industry and our company, while positioning our businesses to continue delivering solid performance," said National City Chairman, President and CEO Peter E. Raskind, in a press release. At the same time, National City has shut down its wholesale mortgage division, a move that others in the industry have already made, resulting in the elimination of 900 jobs. On a day when the entire market was weaker, Citigroup ( C) wasn't able to take advantage of positive comments from Punk Ziegel analyst Richard Bove, and it fell 1.2% to $29.08. Bove said the stock is worth buying because of its global capabilities, even as concerns about its dividend and capital position linger.
His remarks came the same day that a CNBC report said the New York financial-services giant could be planning to cut 5% to 10% of its workforce. Elsewhere, London's HSBC ( HBC) has reached a deal to sell its Wealth & Tax Advisory Services USA unit to a group of the division's managers.
HSBC will receive $5 million in cash and deferred notes with a principal amount totaling $60.85 million. Also, HSBC will have the option to acquire 19.9% of the equity of Wealth & Tax Advisory Services USA. HSBC was off 1.5% at $82.48. Another decliner was Toronto-based insurance provider Fairfax Financial Holdings ( FFH), which declared a $5 dividend on each of its multiple voting and subordinate voting shares. The dividend is payable Feb. 11 to shareholders of record Jan. 14. Fairfax was losing 2.6% to $278.79. On the winning side, Cardinal Financial ( CFNL) rose 0.4%, Synovus ( SNV) gained 2.7%, and Green Bankshares ( GRNB) climbed 7.3% after Keefe Bruyette & Woods put them on its "best ideas" list. Popular ( BPOP) and Wells Fargo ( WFC) were also added to the list, but those stocks retreated. Among sector-tracking indices, the NYSE Financial Sector Index was losing 1.8%, and the Amex Securities Broker/Dealer Index was falling 2.7%.