Synovus Financial Corp. announced several measures aimed at bolstering capital and cutting costs.
The Columbus, Ga., company said its plans include slashing its dividend by 65% and its work force by 9%.
Richard Anthony, the chairman and chief executive officer of the $34 billion-asset Synovus, said during a media conference call Wednesday afternoon that the moves were necessary to deal with the uncertain environment but that he believes no other drastic measures are needed.
"We don't expect another round of" cost cutting, he said, though he said managers will remain mindful of expenses.
Cutting the quarterly dividend to 6 cents a share will save Synovus $144 million in capital a year, he said.
The company could sell some investments if it needs more capital, but it probably will not have to shed businesses or loans, its CEO said.
"We do have some things that certainly work in our favor," he said. He was supportive of the mortgage unit and, like some other bankers before him, said he sees opportunities as other companies scale back.
But acquisitions are on hold for the next two years while Synovus rolls out its efficiency effort. "We'll get back into it, but not right now," Mr. Anthony said.
When it unveiled the Project Optimus efficiency drive in April, Synovus gave little detail. On Wednesday it said the program should cut expenses by $50 million a year and generate $25 million a year in new revenue.
Synovus will realize "the bulk" of the benefits from Project Optimus by the end of 2009, Mr. Anthony said.
The company is implementing about 700 ideas culled from 4,000 suggestions submitted by employees over the summer.
It will cut 650 jobs over the next two years, mostly back-office and support positions. More than half the cuts would be in the form of leaving unfilled positions vacant, and some will be tied to a hiring freeze started in April.
Synovus said it will incur $21 million in restructuring charges, including $15 million this year, to cover severance and other costs tied to various initiatives.
It said the initiatives would include extending call center hours, installing cash dispensers in branches, and developing a new Web portal for commercial customers.
"The hard work is actually just beginning in many ways," Mr. Anthony said. "We are determined tow keep the intensity going."