National City Online Banking – Dragged Down by Bad Loans

National City online banking is considered as one of America’s largest bank in terms of deposit base, mortgages and credits. In 2007 it ranked 9th as a top revenue earner among commercial banks. As a marketing campaign, the slogan “Everyday Banking” persuades customers of the banks ability to service all their funding activities as often as they need to. The institution provides all the usual features of an internet based banking endeavor plus a points-earning program in the use of the bank’s credit card. These rewards range from discounted air and travel fares, restaurant cards, gas cards, shopping cards and popular items such as iPod. Entrepreneurs doing their business via online banking have at their disposal a Business Resource Center for their supply of trade news, tips and other information. Thus, National City Bank earned for itself the recognition of being Number One for Ease and Use in an evaluation test conducted by an independent research team. As an added feather to their hat, the bank was also recognized as the “most trusted retail bank for privacy”, for their effective use of a two-layer security process to ensure the safeguarding of customers’ personal data.

Unfortunately, National City is presently beset by major problems. As of 2008’s second quarter alone, the financial institution announced that its net loss amounted to $1.8 billion, a far cry from the $347 million loss posted in 2007. The bank’s top executives announced that it will need around $7 billion fresh capital infusion in order to survive the downhill trend. Shares of stock plummeted from $40 to $3 per share as of July 15, 2008. The largeness of the bank’s stake on mortgage and real estate construction loans as well as write downs for acquisitions proved to be their downfall. Reportedly, National City had already submitted itself for probation with federal regulators.

Prior to these reports and admissions on the part of National City, an alleged systems breakdown in their online banking inhibited their depositors from using their accounts. The bank had no offer of explanations as to what was the root of the problem, since depositors were baffled that even branch transactions were not posted. In fact customers were assured that any penalties arising from the unrecorded transactions shall be shouldered by the bank including those imposed by other financial institutions.

Sadly, National City online banking faced its bleakest moment with the recent turn of events. The praises and recognition it earned as the consumers’ best choice for electronic banking all went down the drain.