Even though National City Corp. chairman and chief executive David Daberko has pegged this as a rebuilding year for the company, he has not ruled out acquisitions if the right ones come along.

He was quick to emphasize during a presentation Friday, however, that any deals in the near future probably would not include small banking companies.

Mr. Daberko also told analysts that National City has been approached by several banking companies seeking to gauge its interest in merging with them. But those companies only would have slowed National City down, he said.

"The franchises that would be available to us … in theory, unfortunately, bring more businesses that take us the opposite way we want to go with the business mix of this company," Mr. Daberko said during National City's annual meeting with analysts, in which the press was allowed to participate. "The smaller banks tend to do a lot more on-balance sheet mortgage, commercial mortgage and securities types of activities. That is not the direction we believe we should go."

Instead, the Cleveland company's view of acquisitions would be "focused narrowly on enhancing specific business lines," he said. An example, he said, is National City's credit and debit card processing unit, National Processing Inc.

Since 1996, when National Processing lost Wal-Mart Stores Inc. as one of its major customers, it has slowly rallied from the brink of disaster by targeting smaller merchants. Mr. Daberko calls the unit one of National City's stronger business lines.

No time frame was mentioned for any potential deals to expand National Processing.

This summer National City launched a major restructuring of its balance sheet and rid itself of $5 billion in various low-yielding assets it said were hampering profitability. Among the assets was a $2 billion portion of its student loan portfolio. It also parted with some adjustable-rate mortgages and fixed-income securities and shuffled its top management, with the chief executive naming new division heads to pump up its sagging retail business and other parts.

National City executives talked about how the company wants to be more "customer-focused" and wring better performance out of its branch network. The retail business, now run by A. Joseph Parker, will take center stage, they said.

To boost branch productivity and deposits, branch employees are getting extra training under a new sales incentive program.

"We have moved its focus from volume-based rewards to rewards based on value created and revenue generated," Mr. Parker said. Through August, loan volume was up 12% and small-business loans 24%.

"We will be able to show progress next year as initiatives begin to pay off," Mr. Parker said.

National City also aims to build its 80,000-strong base of Internet banking customers. Investments made to meet that objective include $4 million for a revamped Web site unveiled late last month.

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