Investors may take half of National City

National City Corp. may receive $6 billion to $7 billion from a group led by Corsair Capital to help the bank cope with losses tied to sub-prime loans, according to a person familiar with the matter.

The money would be used to boost the bank’s capital, said the person. An announcement is expected to be made today, the person added.

The investors will pay $5 a share -- about 40% less than National City’s closing price Friday -- and take ownership of about half the company’s stock, the person said.

The bank joins lenders and securities firms including Citigroup Inc., Wachovia Corp. and Merrill Lynch & Co. that raised $163 billion to replenish capital after losses linked to sub-prime home loans. The world’s biggest financial companies have disclosed more than $250 billion of write-downs and credit losses, according to data compiled by Bloomberg.

Corsair is a private-equity firm based in New York that has invested in financial services companies since it was founded in 1993 by JPMorgan Chase & Co., its website said.

In 2006, National City ranked among the 10 biggest originators of sub-prime mortgages, which are made to people with weak credit. Late that year, the bank sold its sub-prime loan unit, First Franklin Financial, to Merrill Lynch, where it contributed to a record loss at the securities firm. National City kept some loans First Franklin originated, saddling it with more losses.

The bank has lost about three-quarters of its market value in the last year, making it the worst performer in the 24-stock KBW bank index.

Yet the bank’s $150 billion in assets and network of about 1,400 branches may make it attractive to potential investors.