National City Bank (NCC) CEO Peter Raskind said Wednesday that it’s “simply too soon to say” if the bank will avail itself of government assistance — and if it did, what the impact of that help would be.
“We’re closely studying the potential implications, you bet we are,” Mr. Raskind said. “We’re deeply engaged in that process, that analysis. We’re going to take a little more time than that.”
Mr. Raskind spoke to a crowd of nearly 200 people at a weekly lunch for chartered financial analysts sponsored by the CFA Society of Cleveland. Organizers said the meetings usually attract about 70 people and that Mr. Raskind’s talk was the best-attended event the group has held.
In his speech, Mr. Raskind also addressed rumors that the bank will be sold by saying that while he would not comment about speculation, he is “quite optimistic” about the future of the company.
National City has been steadily reducing its exposure to products sold through brokers and Mr. Raskind said “significant changes” to the bank’s businesses and leadership teams give him reason to be confident.
Still, he said, National City’s board of trustees understands its responsibility to shareholders and would seriously consider selling the bank if that was in shareholders’ best interest. The board considered selling National City in March but decided that the capital infusion was the better choice. Mr. Raskind said that decision has turned out “quite clearly” to be the case.
I bought NCC shares at the beginning of the month for $2 (read why here). The reasoning behind the buy still holds.
Buyout talk: There is something there. Now that Wells Fargo has Wachovia (NASDAQ:WB), Citigroup (NYSE:C), which needs to expand its capital base, has no dancing partner. It remains the most likely candidate, as JP Morgan (NYSE:JPM) and Bank of America (NYSE:BAC) are busy digesting recent acquisitions.
What if it doesn't happen? I still think shares are worth $6 short term and much more long term. I also think that perhaps the reason a buyout has not happened is because NCC is not in the same position both Wachovia and Washington Mutual (NYSE:WM) were. Because of that, the bargain basement price buyers of those institutions got will not be had for NCC. It may be something a potential buyer has to get over.
NCC is the "best of what's left" as far as takeover candidates. If it happens or it doesn't, shareholders (recent ones) will do just fine.