NEW YORK (Reuters) - National City Corp NCC.N, 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 Cleveland-based bank said shareholders authorized an increase in the maximum shares outstanding to 5 billion from 1.4 billion. Shareholders also approved the conversion of some convertible debt into common stock, and the exercise of some warrants. These actions were related to a capital raising plan announced in April, in which National City raised dilutive capital from Corsair Capital LLC and other investors.
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, the Wall Street bank that filed for bankruptcy protection, and has routine derivatives contacts with Lehman’s broker-dealer unit.
Separately, National City named Thomas Richlovsky interim chief financial officer, effective Sept 30. He succeeds Jeffrey Kelly, whose departure had previously been announced. Richlovsky is the bank’s principal accounting officer. National City is looking externally for a permanent CFO.
Reporting by Jonathan Stempel; editing by John Wallace