NatCity Nears $6-$7B Investment

NEW YORK, April 20 (Reuters) – A group of investors led by private equity firm Corsair Capital is close to a deal to invest between $6 billion and $7 billion into National City (NCC), a large U.S. Midwest regional bank, a source familiar with the transaction said on Sunday.

If a deal is struck, it could be announced as early as Monday, the source said.

Such a deal would likely see the investors — which number more than a dozen names — end up with a stake of around 50 percent in Cleveland-based National City, with Corsair owning around 9.9 percent, the source said. The company would continue to be publicly traded following the deal, the source said.

The deal would likely see National City add a director to it's board — Corsair's Vice Chairman Richard Thornburgh, the source said. There would be no imminent management changes apart from the additional board seat, the source said.

Corsair was not immediately available for comment. National City declined comment.

Speculation has swirled around National City since it said earlier in April that it was exploring strategic alternatives, and said Goldman Sachs (GS) would act as adviser.

People briefed on the matter previously told Reuters that the bank had been in talks with more than one potential buyer, including Fifth Third Bancorp (FITB). Other banks reported to have been possible interested parties included Bank of Nova Scotia (BNS) and KeyCorp (KEY). 
National City is scheduled to report its first quarter earnings on Tuesday.

In January, the bank posted a $333 million fourth-quarter loss, hurt by mounting credit losses and write-downs. It said at the time it was hurt by credit losses and the declining value of its portfolio of risky subprime loans. The bank also recorded a $181 million goodwill impairment charge associated with the mortgage business. (Reporting by Megan Davies; Editing by Jan Paschal and Tomasz Janowski)