By Jeff McKinney
Enquirer staff writer

National City Corp. confirmed Thursday it is closing Provident Bank's high-risk mortage lending unit in Cincinnati and laying off an undisclosed number of workers by late October.

National City would not say how many people were laid off from the division or how many people work there.

The Cleveland-based bank notified employees of PCFS Mortgage Resources this week that it would close the division, which provides mortgage loans to "sub-prime" borrowers - people who don't qualify for conventional financing.

Unrelated to its merger with National City, Cincinnati-based Provident Financial Group Inc. had said in late June it was looking for a buyer for the division, allowing it to focus on growing its core banking operations.

"While many bids were received, none reached the terms acceptable for us to sell the entire business," said Chris Kemper, a Provident/National City spokesman in Cincinnati.

Kemper said the job cuts were unrelated to the job cuts National City said it would make when it announced in February it would buy Provident.

National City has not said how many of Provident's 3,200 workers would lose their jobs because of the merger, but the number has been put at 400 to 800.

National City closed last month on its $2.1 billion buyout of Cincinnati's second-largest banking company, Kemper said.

He declined to say how many jobs would be cut but said the employees worked at PCFS Mortgage offices on Vine Street in downtown Cincinnati and in Irvine, Calf.

Kemper said workers have been given 60-day notices and will be eligible for severance pay for a minimum of six months, and other benefits.

He said the block the company was unable to sell included about $260 million in loans held for sale and $1.1 billion in loans originated and secured by Provident.

National City is still trying to sell its mortgage servicing rights unit, which includes $11.1 billion in loans originated and secured by others.

PCFS Mortgage will continue to operate a business that provides financing for other companies that originate mortgages.

Kemper said laid-off workers will be given priority for job openings at National City.

Provident will lose its name and merge into National City by early next year.

E-mail jmckinney@enquirer .com