Marshall & Ilsley Corp. said Thursday it would cut 830 jobs, or 8% of its workforce, cancel 2008 executive bonuses and slash its dividend to a penny from 32 cents a share, after swinging to a $391 million fourth-quarter loss, from a $494 million profit a year earlier.
Its $1.55 a share loss — driven by a tripling of its loan-loss provision to $850 million — fell far short of Wall Street expectations. Analysts on average had forecast a profit of 7 cents a share, according to Thomson Reuters.
The results "reflect the extent to which the current recession has had an impact on our economy," Mark Furlong, the Milwaukee banking company's chief executive, said in a press release.
In its quarterly report, M&I laid blame for the weak results largely on its battered residential construction portfolio, reporting that small and mid-sized residential developers are struggling to pay off loans as housing developments sit unfinished amid waning home sales.
Fourth-quarter net charge-offs totaled $680 million. Non-performing loans and leases were 3.62% of total loans at the end of 2008, nearly twice the level of a year earlier.