Westcorp said late Friday that it will report a first-quarter operating loss and cut its dividend in half because of rising losses at its auto lending subsidiary.

The diversified financial services company, whose units include a thrift, Western Financial Bank, did not quantify the expected first-quarter loss. It did say it would cut its dividend to 5 cents per share from 10 cents, and that charges stemming from its decision to eliminate 20% of its work force would reach $5.8 million, or 22 cents per share.

Westcorp attributed the anticipated operating loss to "continuing deterioration in delinquency and loss trends" in the portfolio of auto lender WFS Financial Inc. As of Dec. 31, Westcorp owned an 83.7% stake in WFS Financial, which was spun off in a public offering in 1995.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.