Capital One Financial Corp. a financial services giant that continues its push into retail banking, reported a third-quarter net loss of $81.6 million
The results for the three months included after-tax charges of $883 million because of the closure of the company's wholesale mortgage unit.
In the third quarter of last year, Capital One reported net income of $587.8 million.
"Capital One remains focused on driving revenue growth, reducing costs, and effectively deploying capital to generate strong returns for our investors," said Richard Fairbank, Capital One's chairman, in the company's statement. "Our businesses are generating robust revenue margins, even as we continue to take a cautious approach to underwriting and managing credit risk in the current environment."
Capital One saw its quarterly results hurt by the shut down of GreenPoint Mortgage Funding Inc. of Novato, Calif., in August, which Capital One acquired when it purchased North Fork Bancorporation of Melville, N.Y., last year for $13.2 billion. In 2005, Capital One paid $4.9 billion for New Orleans-based Hibernia Corp. Those two deals have helped transform Capital One from a larger credit card and finance company into a full-fledged banking institution with hundreds of branches.
GreenPoint focused on jumbo loans above $417,000 and loans to borrowers who do not fully document their income or assets. In recent years, these types of loans have helped fuel a boom in the residential housing sector, but as that market has slowed down investors have shied away from such loans, causing mortgage shops to go out of business or be sold and home buyers to default on their loans at a higher clip.
GreenPoint's shut down has led to 1,900 layoffs, on top of the more than 2,000 job cuts that Capital One (NYSE: COF) announced in late June to control costs.
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