PNC Financial Services Group Inc. will acquire banking and credit card issuer National City in a deal to be finalized by year’s end.
“The acquisition of National City will increase our core deposit base to $180 billion, making PNC the fifth largest U.S. bank by deposits,” PNC chairman and CEO James E. Rohr said in a press release issued Friday.
The merger is the latest in a series of banking moves experts say will consolidate the industry over the next several months. National City’s brand joins Washington Mutual and Wachovia as names that will disappear from the financial landscape in the coming months. (SeeWhat happens to credit debt when a bank fails and Credit crisis survival tips.)
Once the deal is finalized, the new PNC-National City will assume the PNC Bank name. PNC is a Pittsburgh-based financial services organization. National City is headquartered in Cleveland and operates in Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Missouri, Pennsylvania and Wisconsin.
National City’s third quarter 2008 earnings results issued Oct. 21 showed net losses of $729 million, compared to $19 million during the same quarter a year earlier and $1.8 billion during the second quarter of 2008. The statement referred to higher than expected losses on credit card accounts: “In the third quarter of 2008, a $31 million loan loss reserve was established for potentially higher losses on credit card loans.”
Credit card accounts
A PNC company spokesman said people with National City credit cards should not expect changes in the near future and continue to pay their monthly credit card bills as they have.
“It’s a little early in the process. For now, those customers should continue to use those cards as they always have,” PNC spokesman Fred Solomon said in a telephone interview.
“This transaction still has to be approved by the boards of both companies and we don’t expect it to close until the end of the year,” he said. “It’s a little bit early to say what’s going to happen with the cards.”
The 2008 J.D. Power and Associates customer satisfaction survey ranked National City third behind American Express and Discover in overall customer satisfaction. The survey assessed issuers based on interaction, fees and rates, billing and payment services and rewards programs and benefits and services. National City beat out larger credit card issuers JP Morgan Chase (fourth place), Citi (seventh) and Bank of America (ninth).
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