National City Acts to Fend Off Merger

Summary


National City Corp. slashed its dividend to a penny on Monday and secured $7 billion in capital from an investment group to strengthen itself after a mortgage-lending mess almost drove the bank into a merger.

Of the $7 billion invested, $985 million comes from Corsair Capital LLC, a private-equity firm that buys stakes in troubled banks. The New York firm will become National City's largest stockholder, with a 9.9 percent share plus a seat on the board of directors.

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National City Acts to Fend Off Merger

The restructuring, decided at a board meeting Sunday night, means National City is unlikely to be swallowed by another bank as had been rumored, one analyst said.

"They won't be on th...

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