Finance company Advanta Corp. said Wednesday that it will shut its auto finance business and consolidate back-office operations as part of a cost-cutting plan.
The company also said that Carl W. Forsythe, who was chief executive officer of its mortgage division, has left the company and will not be replaced. His responsibilities will be assumed by Advanta Corp.'s chairman, vice chairman, and president, the company said.
An Advanta spokeswoman said the company was maintaining its $2-per-share earnings projection for 1999.
The company said it has already stopped originating auto loans, and that 23 jobs will be affected. Advanta is considering the sale of its existing auto loan portfolio, which continues to be serviced by Nuvell Inc.
Advanta will release more specific details concerning its cost-cutting plan in about two weeks, the spokeswoman said.
Mr. Forsythe, 40, joined Advanta Mortgage last fall. He was formerly director of consumer lending with Home Savings and Loan Association, and left when Home Savings parent H.F. Ahmanson & Co. merged with Washington Mutual Inc.
The most recent announcement is part of a strategy shift at Advanta that included the sale early last year of its credit card portfolio to Fleet Financial Group Inc., and a shift last fall in the way earnings are reported.
"They have been focused on improving profitability," said Prudential Securities analyst Jennifer Scutti. The auto finance business was "just a higher-risk, more difficult business to manage" than Advanta's core home equity and small equipment divisions, she said.
Although Advanta is a much smaller company than it was two years ago, they have one of the strongest balance sheets, compared to their peers, she said.