First Union To Cut Dividend in Half
CHARLOTTE, N.C. (AP) -- First Union Corp. announced Wednesday it plans to
cut its dividend in half starting in March in a move the bank says will give it $5
billion in extra capital over the next five years.
The annual dividend, which will be reduced from $1.92 per share to 96 cents, will bring it more in line with
industry payout averages, First Union chief executive Ken Thompson said.
``Our primary goal is to increase shareholder value, and a strong balance sheet is the foundation for achieving
this objective,'' Thompson said in a news release.
``This will give us more flexibility to deploy our capital in the best interests of shareholders in a tax-efficient
manner,'' Thompson said. ''... Ultimately, we believe, this action will create more value for our shareholders.''
The dividend cut does not reflect a change in First Union's earnings outlook for next year, the bank said in a
release.
The move comes near the end of a year of restructuring by Charlotte-based First Union, the nation's
sixth-largest bank. First Union has laid off workers, sold its credit-card business and shuttered its Money
Store unit. The company also is restructuring its corporate banking unit.
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