National City official says bank is in good shape

CLEVELAND (AP) — National City Corp. CEO Peter Raskind assured shareholders Monday the regional bank, which is trying to recover from steep losses in the home mortgage market, has sufficient capital and is not likely to take a direct hit from the latest financial markets turmoil.

Raskind told about 30 shareholders who came to the company’s headquarters the bank’s business model, which is refocusing on retail and commercial banking, is different than an investment bank’s.

Raskind acknowledged concerns shareholders may have about how financial institutions will respond to the news that Lehman Brothers has filed for Chapter 11 bankruptcy and is trying to sell off key business units. Lehman fell under the weight of $60 billion in soured real estate holdings.

“We have a strong base of deposits,” Raskind told shareholders. “That’s quite different from the business model of an investment bank brokerage firm. So we’ll see what the next days and weeks bring.”

Raskind wouldn’t venture a guess on when the stress on financial markets may ease.

“We’ve certainly been monitoring it closely and reviewing our exposures to Lehman. At the close of business Friday our exposure to Lehman was nominal,” he said.

In July, National City indicated it experienced no unusual depositor or creditor activity after the government seized IndyMac Bancorp. But at the meeting Monday, Raskind indicated the bank had experienced some fallout from the takeover.

“Following the failure of IndyMac Bank in the middle of July, we did see pressure on our deposits base for several days,” he said. “That situation stabilized and deposits have been growing since then.”

The National City shareholders met to complete details of a $7 billion capital infusion deal that was announced April 21.