Richard Carrion, the chairman and chief executive of Popular Inc., said that instead of shrinking only mortgage-related assets and operations, it is taking aim at its core banking operation by slashing staff and branches and even restructuring its operations in Puerto Rico.
Mr. Carrion, who has been leading Popular since 1990 and spearheaded its expansion into new mainland U.S. markets and subprime lending, conceded that the turn of events is a personal setback.
Popular reported a $679.8 million loss Wednesday, mostly tied to the various restructuring measures and deteriorating credit quality in Puerto Rico and the United States. A year earlier it reported a $33 million profit.
Banco Popular North America, the company's Chicago bank, lost $51.7 million in the third quarter. It will close up to 40 of its 139 branches and lay off about 30% of its work force. Popular has laid off 1,104 employees in its mainland consumer finance operations since the restructuring started early last year.
E-Loan, the online mortgage lender Mr. Carrion bought in 2005 as a launching pad for a full-service online bank, lost $87.4 million and ceased all its lending operations but will continue to take deposits. Popular's mainland consumer finance operations, which are being dissolved, generated a $457.3 million loss related to writedowns of assets still on the balance sheet, losses on loan sales, and restructuring charges.