CHARLOTTE, North Carolina (AP) - Wachovia Corp. will slash its dividend and raise $7 billion (4.4 billion euros) in a share sale after the bank reported a surprising first-quarter loss yesterday of $393 million (248 million euros).

"I'm deeply disappointed with our first quarter results," chief executive Ken Thompson told analysts on a conference call. "I know these actions aren't without cost. I wish they weren't necessary, but they are."

The first-quarter loss for the Charlotte-based bank works out to 20 cents a share. That compared with profit of $2.3 billion, or $1.20 a share, a year earlier.

Excluding merger-related and restructuring charges, the bank lost $270 million (170 million euros), or 14 cents a share.

Revenue fell 4.5 percent to $7.89 billion (five billion euros) from $8.27 billion last year.

The results, tainted by exposure to credit markets, were worse than analysts anticipated. Analysts surveyed by Thomson Financial had expected Wachovia to earn 40 cents per share on revenue of $7.98 billion (five billion euros). The earnings estimates typically exclude one-time items.

The nation's No.4 bank said it will cut its dividend by 41 percent to 37.5 cents per share from 64 cents per share. The move is expected to save $2 billion in capital annually "to build capital ratios and provide more operational flexibility", the banks said.

The bank also said it plans to cut 500 jobs within its corporate and investment bank, an area that has been hit by a drop in issuance of complex securities. Since October, Wachovia has cut more than 260 jobs in corporate and investment banking, which had about 6,100 employees as of December 31, 2007.

The share sale will involve common stock and convertible preferred stock. Wachovia said it intends to use the net proceeds from the sale for general corporate purposes.

Wachovia's troubles with the housing slump have been compounded by its 2006 acquisition of California-based Golden West Financial Corp., a $25.5 billion deal whose timing, chief executive Ken Thompson has acknowledged, "was not the best".

Golden West's loans were concentrated in California, one of the hardest-hit housing markets in the US.

Wachovia's share sale will involve 145.8 million shares of common stock at $24 (15 euros) each, raising roughly $3.5 billion (2.2 billion euros). Wachovia also expects net proceeds from a convertible preferred stock offering of about $3.4 billion (2.1 billion euros). The bank said it intends to use the money it raises from the sale for general corporate purposes.

The cash infusion would be Wachovia's second of the year. In January and early February, Wachovia added $8.3 billion (5.2 billion euros) in capital by issuing preferred stock and other securities to investors.

Wachovia joins a long list of companies that have raised capital in the wake of problems in the mortgage market, including Countrywide Financial Corp., Thornburg Mortgage Inc., Merrill Lynch & Co., Morgan Stanley and Citigroup Inc.