The move will cost at least 905 mortgage professionals their jobs at offices in Texas (losing 750), Minnesota and New York. The lender is also cutting 200 call center jobs but this is unrelated according to Bloomberg.
Capital One’s head of financial services Sanjiv Yajnik told employees that the mortgage and home equity loan businesses were “structurally disadvantaged” which prevented them from being profitable or competitive for “the foreseeable future.”
Bloomberg Intelligence data shows that Capital One had $20.6 billion of mortgage loans under management as of June 30, 2017 making it the 12th largest mortgage lender in the country.
However, increased competition including non-bank lenders and FinTech operations have eaten into the market and increased competition.
All of the employees affected were informed Tuesday and given at least 60 days’ notice and offered transition assistance.
The call center closure, also in Plano, TX is another result of changing customer behavior as more customers choose to use other channels in their dealings with the bank.
In its recent financial results, Capital One posted net income of $1.1 billion for the third quarter of 2017, up slightly from $1 billion in the second quarter.
The lender’s founder highlighted at the time that it was transitioning its business operations amid the digital revolution.
"We posted another quarter of resilient and responsible growth," said Richard D. Fairbank, Chairman and Chief Executive Officer. "We continue to carefully manage risk across our businesses. And, we're driving improving efficiency even as we invest to grow and to transform our company as banking goes digital."
More market update:
Capital One says that fierce competition in the mortgage and home equity loans business is behind its decision to stop new originations.