PNC saves National City in $5.6bn deal

PNC Financial Services Group has agreed to buy the ailing National City Corp in a US government-backed $5.6bn (£3.5bn) deal that will rescue the Ohio-based lender and create the No 5 US bank by deposits. National City has been hurt by the falling value of home loans it held after selling sub-prime lender First Franklin Financial Corp to Merrill Lynch in late 2006. Acquisitions of two Florida banks in 2006 and early 2007 added to its woes. Other US financial companies that have been or are being swallowed up by lenders considered healthier include Bear Stearns and Merrill Lynch. Pittsburgh's PNC said its offer valued National City at $2.23 a share.