National City to explore alternatives

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National City Corp., one of the largest banks in Indianapolis, has hired the Wall Street investment bank Goldman Sachs to seek strategic alternatives, the Cleveland-based institution said yesterday.

The announcement stopped short of confirming rumors circulating for weeks that the bank would seek a buyer. The bank said the review process would not hamper day-to-day operations.

National City has accumulated deep problems through subprime house mortgages and other housing loans. The bank lost $333 million in the fourth quarter, cut its dividend in January and said it would close its wholesale mortgage division.

This morning, The Wall Street Journal reported that National City is considering selling itself to KeyCorp., also headquartered in Cleveland. The newspaper didn’t disclose its sources for the story.

With 1,400 employees, National City Bank is the second-largest bank in the Indianapolis-area, according to IBJ research. It has 77 locations in the area.

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