DOJ Tells PNC to Sell 61 NatCity Branches

By Joe Bel Bruno

NEW YORK -- PNC Financial Services (PNC Quote) said Thursday it is being told by the federal government to sell 61 branches of National City (NCC Quote) in western Pennsylvania as a condition for acquiring the bank.

National City's nearly 30,000 employees, from top managers to bank tellers, were being informed during the afternoon that the Department of Justice would announce the order later in the day.

A spokesman for the Department of Justice declined to comment.

The department's order wasn't a surprise; PNC Chairman James Rohr said when the $5.6 billion deal was announced Oct. 24 that the combined bank might be forced to sell branches in western Pennsylvania. The bank becomes the nation's fifth largest by deposits and the fourth biggest in terms of branches.

It was not immediately known which branches would be affected, or what the impact might be on employees or account holders. It was also too early to tell who might be potential buyers. It is fairly common for the government to make branch sales a condition of antitrust approval for a merger between banks that are located close to one another.

"This is an important step in PNC's National City acquisition," said PNC spokesman Fred Solomon. "It might take another 180 days or so to transfer those branches to a new buyer.

Pittsburgh-based PNC is the first U.S. bank to use money obtained under the government's $700 billion bailout program to make an acquisition. National City is based in Cleveland.