UPDATE 1-Quest Capital to cut jobs, CEO to step down

* To close Toronto office

* To incur charge of C$1.5 mln in Q2

* Expects to save C$1.7 mln

* Amends credit facility * Says intends to cancel trading on AIM

May 4 (Reuters) - Mortgage financier Quest Capital Corp (QC.TO)QCq.L said it plans to cut jobs to reduce overhead costs amid a weak credit market, and that its Chief Executive Officer Stephen Coffey will step down.

Coffey will step down effective May 21, and be replaced by Brian Bayley, who is currently co-chairman, Quest said.

Credit market weakness began affecting certain components of its loan portfolio during the last half of 2008 and resulted in the first loan losses it has experienced in many quarters, the company said in a statement.

Quest, which said it will close its Toronto office, expects to incur a charge of C$1.5 million, or 1 Canadian cent a share, in the second quarter. It expects to save C$1.7 million beginning in the second quarter.

The company expects its cost cutting initiatives to help eliminate its bank debt by the end of the year.