National City stock plunges

The stock dropped nearly 26 percent Friday.

CLEVELAND (AP) — National City Corp. took another plunge Friday on Wall Street as investors worried about banks with bad mortgage portfolios in the wake of Washington Mutual’s collapse.

National City shares closed down $1.28, or nearly 26 percent, to $3.71. Earlier in the day, shares had fallen to $2, a 52-week low.

On Thursday, the Federal Deposit Insurance Corp. seized Seattle-based Washington Mutual Inc., which collapsed under mounting losses. FDIC sold the banking assets to JPMorgan Chase & Co. for $1.9 billion.

WaMu, the nation’s largest thrift, became the nation’s largest-ever bank failure.

Shares of Charlotte, N.C.-based Wachovia Corp. also dropped 27 percent Friday.

Cleveland-based National City, a large regional bank, insisted its situation is sharply different and more secure than that of Washington Mutual.

“There is no disputing the fact that it’s been a volatile day,” said Kristen Baird Adams, National City spokeswoman. “But National City and WaMu are fundamentally different companies in fundamentally different positions.”

Meanwhile, the Bush administration and Congress sought to negotiate a $700 billion financial bailout. That plan would allow the government to buy bad mortgages and other troubled assets, easing the burden on financial companies. The goal was to make the companies more willing to lend.

National City is confident it is solid no matter the outcome of Washington’s bailout plan, Baird Adams said.

The bank in April arranged a deal with private equity investors to secure $7 billion in capital, and company officials have assured shareholders that it is now well capitalized and able to survive a troubled market.

In July, National City reported a $1.76 billion loss for the second quarter.

Since late last year it has also shifted away from risky mortgage lending.

“We have continued to invest in our retail, corporate and wealth management businesses, which remain quite strong,” Baird Adams said.