National City Corp. said Thursday it has an agreement to sell its interest in a Louisville, Ky., investment advisory boutique to a wholly owned subsidiary of Amvescap PLC, a London asset management company, for an undisclosed price.

National City of Cleveland said it would record a second-quarter gain of $85 million to $95 million on the prospective sale of its remaining portfolio of preferred stock in National Asset Management Corp.

The deal is scheduled to close in May.

The gain would amount to 9 to 10 cents per share after taxes and would more than offset a charge of $40 million, or 7 cents per share, that $89 billion-asset National City is taking this quarter to settle a tax dispute with the Internal Revenue Service.

Amvescap, which runs the mutual fund groups AIM and Invesco, said it would pay $200 million in cash and shares for the part of National Asset Management that National City does not own — along with $25 million in retention payments over the next five years.

National City has made several moves in the last few months to focus on its most profitable businesses. But Thomas Richlovsky, senior vice president and treasurer at National City, said the sale of National Asset Management does not represent a move to exit the asset management business.

In fact, the company is looking at growing its asset management unit, he said. “If the right opportunity came along, we would be interested in enhancing asset management.”

The pretax gain in the second quarter would benefit the company, but National City would lose the regular quarterly income of $2.5 million it gets from the preferred share dividends, Mr. Richlovsky said.

National City has said it may have to take another charge later this year to cover the expense of settling the tax issue through negotiations. The company said this week that it would continue to seek refunds on the $200 million the IRS is seeking, and that a favorable court ruling could mean an increase in net income.

Usually companies try to balance charges and gains in the same quarter. Even though National City is taking its charge and gain in separate quarters, Mr. Richlovsky said he expects investors to overlook them. “I would expect the Street to look at our results excluding both of those items,” he said.

Henry C. Dickson, an analyst with Lehman Brothers, said any impact from the sale of the interest would be “modest.” The loss of the $2.5 million of preferred stock dividends represents approximately one-half cent per share of earnings, he said. “What they are really giving up is an income stream.”

The sale of the National Asset Management stake is just another move in a competitive business area, Mr. Dickson said. “Weaknesses will drag earnings growth rates,” he said. “Companies want to play their strengths.”

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