April 1 (Bloomberg) -- National City Corp., Ohio's biggest bank, may sell itself as the Cleveland-based company faces the prospect of more losses from subprime home loans.

The board of directors is reviewing ``strategic alternatives,'' according to a statement, using language commonly understood on Wall Street to mean a company wants to be bought.

National City joins lenders and securities firms including Countrywide Financial Corp. and Lehman Brothers Holdings Inc. seeking buyers or cash infusions following losses tied to subprime home loans. The world's biggest financial companies have recorded at least $232 billion of writedowns and losses. National City posted a $333 million fourth-quarter net loss.

``Capital is king in this environment,'' said Terry McEvoy, an analyst at Oppenheimer & Co. in Portsmouth, New Hampshire. ``They need to strengthen the balance sheet through additional capital, or the other alternative is to merge or be acquired.'' He rates the stock ``market perform.''

National City hired Goldman Sachs Group Inc. as an adviser, the company said, adding there's no guarantee a transaction will happen and the bank doesn't expect to elaborate until something specific is approved.

``The review has no impact on National City's day-to-day operations,'' said Chief Executive Officer Peter Raskind in the statement. Kristen Baird Adams, a spokeswoman for National City, said the company had no further comment. The bank is the 9th- largest in the U.S. by assets.

KeyCorp, JPMorgan

National City gained 4 cents to $9.99 in 4:15 p.m. New York Stock Exchange composite trading. The bank has lost almost three-quarters of its market value in the past year.

Logical buyers are KeyCorp, also based in Cleveland, and JPMorgan Chase & Co., the third-largest U.S. bank, said Punk Ziegel & Co. analyst Richard Bove in a note last month. Banks from the Middle East or China may bid for National City, he said.

``Goldman Sachs has got its work cut out for it,'' Bove said in an interview today. He also added that Cincinnati-based Fifth Third Bancorp could also bid for the lender in order to gain branches in Florida.

Wells Fargo & Co., the No. 5 U.S. bank, may consider a Federal Reserve-assisted takeover of a troubled bank, the San Francisco Business Times reported late last month, citing CEO John Stumpf.

Subprime Loans

``Fixer-uppers don't bother us,'' said Stumpf, whose bank is based in San Francisco. Chairman Richard Kovacevich said yesterday on CNBC the company doesn't discuss talks that may be in progress.

Lynne Woodman, a spokeswoman at KeyCorp, and Thomas Kelly, a spokesman at New York-based JPMorgan, both declined to comment.

National City ranked among the 10 biggest originators during 2006 of subprime mortgages, which are made to people with the weakest credit. The bank sold its subprime-loan unit, First Franklin Financial, at the end of 2006 to Merrill Lynch & Co., where it contributed to a record loss at the New York-based securities firm. National City kept some subprime loans First Franklin made, which saddled the bank with continued losses.

National City operates in Ohio, a state in the top 10 nationwide in foreclosures in February, according to data from RealtyTrac. The company tried to combat a slowing economy by expanding in 2006 into Florida, which had the third-highest foreclosure rate in February.

Mortgage Casualties

The company offered $1.4 billion of convertible notes earlier this year as part of its plan to raise capital, for which Goldman served as the adviser. The bank also halted home loans through brokers and started firing employees in that business, bringing total cuts to 3,400, or about 10 percent of its workforce, in one year.

Standard & Poor's Corp. on March 21 lowered its outlook for National City to negative from stable, citing expected losses on home loans.

At least 100 mortgage companies have stopped lending or sold themselves since the start of 2007, according to data compiled by Bloomberg.

Countrywide, the biggest U.S. mortgage lender, agreed to sell itself in January to Bank of America Corp., the second- biggest U.S. bank, for about $4 billion. Bear Stearns Cos., once the biggest underwriter of mortgage-backed bonds, was forced to agree to a buyout by JPMorgan at a fraction of its market value.

Lehman Brothers, the fourth-largest U.S. securities firm, raised $4 billion from a convertible stock sale this week to quell speculation it's short of capital.

To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net.

Last Updated: April 1, 2008 17:41 EDT