All Eyes on National City Bank Among Prediction Market Bettors
With Wachovia now sold to Citibank and then to Wells Fargo and maybe again to Citibank last week in the never ending drama centering around US banking turmoil, attention is now shifting to the next likely bank to fail....Speculators at online prediction markets the likes of Intrade.com believe that National City will be next to collapse.
Ohio's largest bank may go the way of Wachovia however.
``There are strong rumors that the bank will be acquired,'' said Jeffrey Saut, chief investment strategist at Raymond James Financial Inc., in an interview early last week regarding National City.
Intrade.com has the chances of a National City Bank failure at over 94 percent at press time, an unprecedented number.
National City, which was founded in 1845, used to be one of the ten largest banks in America in terms of deposits, mortgages and home equity lines of credit. As of 2007, National City Corp. ranked number 188 on the Fortune 500 list, and 9th in terms of revenue in the U.S. commercial banking industry with total assets of about $140 billion and a market cap of $24.542.1 billion. The bank has 1,500 branches in nine states with 400 offices in Ohio.
National City spokesperson, Kristen Baird Adams, said late last week that the bank is stable, has good money reserves and its customers' money is safe.
She said National City recognizes how volatile the banking industry is. However, in response to rumors that the back is in trouble Adams said, "Those are unlawful rumors. We are open for business."
The bank is confident about its future because it raised $7 billion in capital in April. Plus, Adams said the bank is no longer underwriting what some refer to as high-risk loans and mortgages.
National City Bank's share price rose last week following news the Wachovia had been acquired by Citibank.
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Jagajeet Chiba, Gambling911.com
