Regulators watching National City: source
WASHINGTON (Reuters) - The banking subsidiary of National City Corp NCC.N has signed a confidential memorandum of understanding with U.S. regulators, promising to address its rising amount of bad loans, a source familiar with the matter said on Monday.
The memorandum signed by the bank and the Office of the Comptroller of the Currency requires the bank to improve what examiners see as potential problem areas.
The document serves as an early warning about problems that National City must address to prevent formal enforcement action, the source said, speaking on condition of anonymity.
A National City spokeswoman and the comptroller's office declined to comment.
In May, Cleveland-based National City said it raised $7 billion in capital and also slashed its dividend. The bank has struggled with exposure to the hard-hit Ohio and Michigan real estate markets and a badly timed foray into Florida.
U.S. regulators have pushed banks to boost capital levels, improve risk management and replenish liquidity as they weather the financial turmoil brought on by subprime mortgage lending and lax underwriting standards.
Last year, nine institutions entered into similar memoranda with the comptroller's office, which brought 53 enforcement cases against banks.
(Editing by Gary Hill)
