Friday, October 24, 2008

does the PNC purchase help or hinder the image of a Cleveburgh?

attention Youngstown: the signage on one of your downtown's buildings will be changing.

This blog's most recent post concentrated on the necessity and opportunities for the Cleveland, Akron, Youngstown, and Pittsburgh regions to come together - known often as the Cleveburgh region.

So while this space will not go into the economic impact from a fiscal or jobs perspective regarding today's purchase of National City Bank (headquartered in Cleveland - largest bank in Ohio) by PNC (headquartered in Pittsburgh - now 5th largest bank in the US).

So a question for all of you:

Does the news today of the emergence of PNC in Youngstown, with an enlarged footprint now including Northeast Ohio, help or hinder the development of "the Cleveburgh mega-regional concept".

On one end, we are witnessing the creation of entities that will share fiscal and philanthropic resources across the 7.1 people in the Cleveland to Pittsburgh belt.

On the other end, will a mentality of "hey those Pittsburgh dudes are screwing us in Cleveland" prevail?

Judging by the immediate reaction of the Cleveland Plain Dealer, one might say the latter option.

From their lead of the PD's story today:
Climaxing a collapse that began 14 months ago, National City Corp. is being sold.

The Cleveland bank, the largest in Ohio, is being purchased by PNC Financial Services of Pittsburgh for $2.23 per share.

The news is among the worst the local giant, with 8,000 employees in Northeast Ohio, could receive. PNC, just 130 miles and less than three hours from National City's headquarters, will almost certainly slash thousands of local employees.

1 comment:

Jim Russell said...

For contrast to the story in the PD, read these two articles in the Financial Times about the acquisition:

Still, the government’s capital cocktail will boost the combined businesses’ tier one to 10 per cent against PNC’s ratio of 8.2 per cent. And the pairing of the so-called “super-regionals” forms the fifth largest US bank by deposits, sprawled across the Midwest and the north-east. Granted, states such as Michigan will not offer the most tantalising growth prospects in the near term. But PNC has experience of ekeing growth from sluggish markets, while overlaps will help find $1.2bn in cost savings. Longer term, PNC will need to rebuild share of combined revenues coming from fees rather than spread lending.