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Goldman begins National City review

Goldman Sachs has been brought in to advise National City following further predicted losses via the sub-prime mortgage market.

In the fourth-quarter the bank reported a net loss of $333 million and is currently considering "strategic alternatives" which is often Wall Street-speak for a buyout.

National City is not confirming whether a buyout is imminent and is playing down the effect of the meetings with Goldman Sachs.

Peter Raskind, chief executive officer at the bank, said: "The review has no impact on National City's day-to-day operations."

Two years ago National City was one of the ten largest suppliers of mortgages to homebuyers with poor credit ratings. Merrill Lynch bought First Franklin Financial, its sub-prime mortgage division, but retained some of the loans. This is believed to have contributed to the losses experienced.

Up to ten per cent of National City employees have recently been sacked and brokered home loans have been withdrawn.