PNC Financial buying National City Bank for $5.58 billion dollars

October 24, 2008 by · Leave a Comment
Filed under: Bank Failure 

 PNC Financial Services Group Inc. said Friday it is acquiring National City Corp. for $5.58 billion, in one of the first concrete signs of how banks could use fresh investments from a U.S. government bailout program.

The deal comes within hours of PNC Financial receiving approval for $7.7 billion in cash from the government under the $750 billion government program aimed at relieving the ongoing credit crisis.

The agreement combines Pittsburgh-based PNC with National City, a large, Cleveland-based regional bank weighed down by high-risk mortgage loans, and is the latest deal in the rapidly consolidating banking industry.

The acquisition makes PNC Financial the nation’s fifth largest bank by deposits and will give it the fourth most branches, said James Rohr, PNC’s chairman and chief executive, during a conference call with investors and analysts. The new combined bank will have about $180 billion in deposits and more than 2,700 branches.

“PNC now becomes a major force in retail,” said Bart Narter, a senior vice president in the banking group at consulting firm Celent. “PNC just doubled in size for not a lot of money.”

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