National Citys Purgatory
October 22, 2008 by Poppa Bear
By Tony, Bank Implode
National City lingers now in purgatory, open for business as usual, but drifting toward insolvency. As the credit crisis works its way down the food chain to second tier banks National City becomes the caricature for the regional banks that Washington Mutual and Lehman Brothers were for the big banks. For its fiscal third-quarter 2008 national city reported losses, write-downs, loan-loss builds and the elimination of 4000 employees.
National City will cut about 4,000 jobs, or 14 percent of its workforce, over the next three years after posting a net loss of $729 million, or 85 cents a share, the Cleveland-based company said in a statement today.
National City’s provision for loan losses tripled to $1.18 billion in the third quarter from a year earlier. The company’s total deposits averaged $98.7 billion during the third quarter, declining less than $1 billion from the previous quarter and up $5.2 billion from a year earlier. The bank said new customers added in the quarter “partially offset declines in deposit balances in excess of FDIC insurance limits.” Read more….
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Try stating ALL of the facts! I guess you missed the part where National City is now an overnight lender instead of an overnight borrower…gee there’s a lot of income, the 4,000 employees to be cut, that’s over 3 years, it’s also not a guaranteed 4,000, that’s projected, Raskind and the board ALWAYS project high, will most likely be half that. The cuts are necessary cuts anyway, spending in NCC got out of controls, it’s not mission critical cuts, it’s the unneccessary back office staff that spend most of their time on the internet. Guess you also forgot about the exit portfolio, The Corporation’s Exit Portfolio (formerly termed “Liquidating Portfolio”) was formed so that loans remaining from exited businesses and discontinued products could be managed separately from National City’s core retail banking, corporate banking and wealth management businesses. This $21 billion portfolio consists of broker-originated home equity loans, nonprime mortgages, non-agency mortgages, residential construction loans, and automobile, marine and recreational vehicle loans originated through dealers.
These loans, which are in run-off mode, have been declining about $500 million per month, and are actively managed to mitigate losses by a dedicated team headed by recently appointed Executive Vice President James LeKachman, an experienced risk management executive. Significant resources and talent are devoted to this effort, which includes ongoing evaluation of potential strategic alternatives. Undrawn home equity lines have declined $2.9 billion since year end.”
Did you catch that??? “declining about $500 million per month” You NCC bashers need to get over yourself, do some fact checking and some thought processing before you write these articles”