National City Bank got the OK to raise $7 billion in an equity sale that will increase outstanding shares more than three-fold in a move to shore up it’s balance sheet. Investors watching their shares diluted had little choice but to approve the equity sale to keep the bank solvent in the midst of the credit crunch. National City is one of a handful of super-regional banks who have been put on the ropes by the mortgage meltdown.
From Reuters:
National City Corp (NCC.N: Quote, Profile, Research, Stock Buzz), a U.S. Midwest regional bank battered by mortgage losses, has won stockholder approval to authorize new shares to allow for a $7 billion capital infusion, the bank said on Monday.
The new capital gives National City “the necessary flexibility to address current market challenges,” Chief Executive Peter Raskind said. He added that the bank has no exposure to Lehman Brothers Holdings Inc (LEH.N:Quote, Profile, Research, Stock Buzz), the Wall Street bank that filed for bankruptcy protection, and has routine derivatives contacts with Lehman’s broker-dealer unit.