MNC Financial Inc., the parent company of Maryland National Bank, plans to terminate several hundred workers in the next several months as it tries to cut $100 million from its expenses.
A bulletin issued to employees yesterday did not specify exactly how many workers would lose their jobs or when. But an MNC spokesman said most of the terminations will take place in the next three months and may stretch into later this year.
The cuts come as the company continues to reduce its size, moving from a $29 billion company at the beginning of 1990 to a $15 billion to $17 billion company by the end of this year. "We need to create a cost structure before we enter 1992 as a $15 billion company," said MNC spokesman Daniel G. Finney.
The company now has about $20 billion in assets after selling its credit card division and various other subsidiaries.
The new cost cutting will trim about 15 percent of MNC expenses, according to the bulletin.
The company now has about 9,900 employees. The company had terminated about 700 workers from the summer of 1989 through June 1990 as a result of MNC's acquisition of Equitable Bank N.A. at the end of 1989, according to Finney.
Details of the severance package have not been worked out, Finney said, but they would be comparable to those given employees who were terminated as the result of the Equitable acquisition. He said he did not recall what the previous package had been, but it did include assistance in helping workers to find other jobs.
The reduction in assets will be done by selling commercial loans, non-performing real estate loans and various remnants of subsidiaries that had been sold to other companies, Finney said.
In the bulletin to employees, Frank P. Bramble, MNC chief operating officer, is quoted as saying the company's liquidity and capital problems have been solved. "We have begun to slow the growth of our non-performing loans, we produced positive results for the first quarter and for many it appears MNC has turned the corner," Bramble says.
But he also says the poor economic outlook, along with lower interest income and high levels of bad loans, will continue to hurt earnings in 1992 and beyond.
In the first quarter, MNC reported a net income of $154 million, or $1.75 a share. But without the one-time gain from the sale of the credit-card division, MBNA Corp., MNC would have lost about $150 million, or $1.75 a share.
The credit-card sale amounted to a $444 million pretax gain, or about a $300 million after-tax gain.