National City CEO Peter Raskind's last three months haven't been much better than the previous three. The company's stock hit a low of $1.25 in September as Wall Street worried losses from bad loans and the national credit crisis would cause the bank to fail. The company also has been rumored as a prospect for a buyout. In a conference call Tuesday, Raskind told Wall Street analysts that the company lost $729 million dollars over the last three months. Here's an excerpt from the call, with some translation from me.
Peter Raskind: A limited number of segments in our exit portfolio loans generated the majority of our net chargeoffs for the quarter.
Translation: Nat City has been hammered by $21 billion invested in businesses it's getting out of like subprime, residential construction and home equity loans sold by brokers, not banks.
Peter Raskind: Specifically $8.4 billion of these loans, representing 8 percent of total loans, accounted for 40 percent of total net chargeoffs recorded in the third quarter.
Translation: That big pool of bad loans, only a part of it is causing Nat City's problems.
Peter Raskind: The remainder of the exit portfolio loans show stable to improving trends.
Raskind has said repeatedly that the company has enough cash to get through the current credit crunch. The new cost savings plan...which includes 4,000 layoffs... is expected to save the bank $500 to $600 million annually. Investors liked the news, though good stock market news is all relative these days. National City's stock jumped up 2.4 percent yesterday to just under $3. A share. Mhari Saito, 90.3.