National City Corp. of Cleveland said fourth-quarter profits fell 10.3%, to $308 million, as charges for a balance sheet restructuring and a business divestiture overshadowed gains from lending.

Since last summer the $88.5 billion-asset banking company has been quitting certain businesses and shoring up its balance sheet to focus resources on higher-profit activities. National City took $51.1 million of related charges in the quarter - $44 million for a realignment of its consumer finance operations and $7.1 million for goodwill associated with the sale of a small unit of its National Processing Inc. subsidiary.

Last month National City said it would close its Loan Zone consumer finance stores, leave the wholesale loan origination business of its Altegra subsidiary, and get out of automobile lending.

Without the charges, earnings per share of 55 cents matched expectations.

Profits fell 7.3% for the year, to $1.3 billion.

David Daberko, chairman and chief executive officer, said in a press release that the balance sheet and other restructuring actions "favorably position National City to restore the sustainable revenue and earnings momentum our stockholders deserve."

Since the restructuring began, National City has sold $2 billion of student loans, $3.7 billion of fixed-rate debt securities, and $1 billion of adjustable-rate mortgages.

Net interest margin in the fourth quarter was unchanged from the third, at 3.90%. On an annual basis, loans grew 17% in the quarter, to $64.6 billion. National City cited growth in commercial loans and leases and home equity lending.

Fee income rose 4.4%, to $604.8 million, for the quarter. National City cited growth in trust and investment management fees, deposit service charges, and mortgage banking revenues. The company's residential loan servicing portfolio ballooned 23% from the fourth quarter of 1999, to $57.4 billion.

Investments in bank stocks netted gains of 40.8%, to $50.3 million. Venture capital investments jumped fourfold, to $26.7 million.

Expenses rose 9.5%, to $854.4 million, on charges for realigning the consumer finance business.

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