Magazine article American Banker

Some Question Nat City's Transition to Commercial

Magazine article American Banker

Some Question Nat City's Transition to Commercial

Article excerpt

Wall Street has been wondering what was in store for the mortgage-dependent National City Corp. when the boom ends.

Now analysts are divided about the clues offered in the $121 billion-asset Cleveland company's third-quarter earnings report, released late Wednesday.

Michael L. Mayo of Prudential Equity Group on Thursday upgraded National City's shares to "neutral weight" from "underweight." In a research note Thursday, he wrote that the results were good enough to ease some concerns. "National City still lacks major sparks," but "nonmortgage-related banking areas showed improvement."

He said he particularly likes its consumer loan business and fee income lines.

During a conference call with analysts and investors on Thursday, David A. Daberko, National City's chairman and chief executive, conceded that commercial loan demand is still slow. But he also said his company "was never better positioned" to benefit from an economic upswing.

In a statement issued with the earnings report, Mr. Daberko said the third quarter was "the beginning of a transition period" from mortgage to nonmortgage lending.

National City's consumer business is strong, and the company is gaining commercial market share, he said. "The combination of market share, new [loan] volume, and lower credit costs implies very strong earnings potential."

Philip L. Rice, the president and CEO of its Ohio banking subsidiary, said in a telephone interview that even though commercial credit demand from existing clients was flat during the quarter, new customers made loan commitments. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.