National City Announces Decision to Exit Indirect Retail Auto and Motorsports Lending Business

Quantifies Charges Expected for Fourth Quarter

CLEVELAND, Nov. 15 -- National City Corporation today announced its decision to exit the indirect retail auto and motorsports lending business. Continued low returns and volume challenges were the primary factors in the company's decision.

National City will continue to serve the automotive dealer community with comprehensive commercial and cash management banking products, including floor plan and real estate lending, treasury management, employee banking, and private client services. The company will continue to pursue growth in its national Recreation Finance lending business for both indirect retail and wholesale products. National City also will continue to originate direct auto and motorsports loans through its retail branch network.

"We continually review our business strategies to ensure they support long-term, sustainable revenue growth. The decision to end indirect auto and motorsports originations was difficult, as we have participated in the segment for many years," said National City Vice Chairman Peter E. Raskind. "However, given the low returns and better opportunities to employ our capital elsewhere, we have determined that it is now the appropriate time to exit."

As a result of this decision, National City will incur approximately $40 million of incremental charges in the fourth quarter, primarily asset write- downs and employee severance. In addition, the company is also incurring costs associated with the initial implementation of its ongoing Best In Class program, including severance, lease terminations, and other items. These costs, together with the charges related to the exit of the indirect auto and motorsports business, are expected to total between $100 million and $120 million in the fourth quarter.

Best In Class is an internal program designed to improve the long-term performance of National City by identifying opportunities for long term, sustainable revenue growth. The program also entails identifying opportunities for cost savings and organizational realignments to more effectively and efficiently meet the needs of National City customers.

About National City

National City Corporation , headquartered in Cleveland, Ohio, is one of the nation's largest financial holding companies. The company operates through an extensive banking network primarily in Ohio, Illinois, Indiana, Kentucky, Michigan, Missouri and Pennsylvania, and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management.