Tuesday, October 28, 2008

PNC buys National City   While mergers and acquisitions are lagging across the board due to lack of financing and perceived risk, financial institutions are still buying,  In this case, it strikes home for me.  My bank, PNC Financial (Pennsylvania's largest bank) announced it would buy Ohio-based National City Bank for $6.3 billion.   The  merger of the two regional banks would create the fifth-largest US bank by deposits,  While PNC managed to avoid the worst of the subprime mess, National City, accoridng to Bloomberg News, had been among the top ten subprime lenders nationally. Like WaMu and Wachovia, its folly lead to a takeover by a slightly smarter bank. National City did manage to sell off its subprime loan unit, First Franklin Financial, to Merrill Lynch in 2006, leading to that company's demise. But then with proceeds, it bought Florida-based banks Fidelity Bankshares Inc. for $1 billion and Harbor Florida Bancshares for $1.1 billion the same year,  These two loaded it down with a fresh set of losing mortgages.   Nation City has more than 1,400 branches, mostly in Ohio and Michigan.  PNC bank branches are in Pennsylvania primarily, and number about 1,350. Retail banking is likely to remain profitable, if prudently mnaged,  even in the worst of teh recession.   This rgeional bank tieup follows the move by Wells Fargo to become one of the four nationwide banks. All likelihood is mre regional bank mergers. 8:42:36 PM

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