Telling your investors you've just lost nearly $1.8 billion dollars is never going to be fun. Especially when it's your fourth straight quarter in the red and the amount of loans you had to write off rose from $98 M million dollars to $740 M million in12 months. But National City's CEO Peter Raskind and his top brass told investors and analysts that they have raised $7B billion in capital - enough cash to get them through their troubles. And in today's financial markets that kind of news is good enough, says RBC Capital's Gerard Cassidy.
Gerard Cassidy: This capital cushion that they have is quite substantial so based on what we know today and based upon today's economy they have plenty of capital to live for another day and fight these problems.
National City's woes in the second quarter come from a hefty charge it had to pay because of previous acquisitions and it's exposure to subprime mortgages and homebuilder loans. The company is the latest large Ohio bank to report a tough second quarter. KeyCorp and Cincinnati's Fifth Third also posted big losses thanks in part to troubled homebuilder loans.