National City Corp. reviews its options

There is a rumor the bank wants to find a buyer.

CLEVELAND (AP) — National City Corp., a Midwestern bank heavily exposed to the worsening mortgage and housing market, confirmed Tuesday that it is reviewing its options amid rumors that it wants to find a buyer.

New York investment bank Goldman Sachs has been hired to look into strategic alternatives, the Cleveland-based bank said. However, National City has not confirmed that it is seeking a buyer and did not elaborate on what alternatives are being considered.

“The review has no impact on National City’s day-to-day operations,” National City’s chairman and chief executive, Peter Raskind, said.

No further public comment on the review was expected until the company board comes to a decision, National City said.

“A review of the company would revolve around increasing capital levels in light of market conditions and evaluating any potential buyers or partners for National City, in our view,” Oppenheimer analyst Terry McEvoy noted Tuesday in a report.

On Jan. 2, National City cut its dividend 49 percent and said it was shutting down its wholesale mortgage division, eliminating 900 jobs. It has slashed about 3,400 jobs in recent months, and has refocused on direct relationships with borrowers and exited broker-originated mortgage lending.

In the final three months of 2007, National City lost $333 million, compared with a profit of $842 million in the prior year’s fourth quarter, when National City sold its First Franklin mortgage business. National City said it expects to report its first-quarter earnings April 22.

National City operates about 1,400 bank branches spread mostly across Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Missouri, Pennsylvania and Wisconsin.