Continental Bank to Cut 270 Jobs, Reduce Dividend
Continental Bank Corp., successor to the bank that rattled the U.S. financial system in the mid-1980s when the government saved it from failure, said Friday that it is restructuring operations and cutting staff.
Continental will trim about 270 jobs, cut its quarterly dividend to 15 cents from 25 cents and write off $175 million in earnings, causing a net loss for the current quarter.
The restructuring is the latest chapter in the long-running saga of what was once the Midwest’s largest bank. As of the end of 1990 it was the fourth-largest in the region and was ranked 26 in the nation.
Continental Illinois Corp., as it was then called, was hurt by bad loans in Texas and Oklahoma and saved from failure by federal regulators in 1984. At the time, it was the biggest federal bank bailout in history.
As part of its latest restructuring, the new Continental, a provider of merchant banking services mostly to large companies, said it had given up its position as a primary dealer in U.S. government securities.
The company said the 5% reduction in its work force, which numbers about 5,400 people, is anticipated to save $17 million annually.
Continental stock closed off 87.5 cents at $12.375 in heavy trading on the New York Stock Exchange.