MNC Financial to Sell Credit Card Unit
MNC Financial placed its profitable $1-billion credit card operation on the market Thursday in an attempt to shore up its faltering finances.
The move came as MNC, the parent company of Maryland National Bank, reported a third-quarter loss of $173 million, or $2.05 a share, after setting aside $350 million for possible credit losses.
The $350-million loan loss provision increases the reserve for credit losses to $791 million, or 94% coverage of total non-performing loans.
MNC reported earnings of $68.8 million, or $1.13 per share, during the 1989 third quarter.
The company and its banking subsidiaries also have entered into written agreements with the Federal Reserve Board and the Office of the Comptroller of the Currency, giving the regulators broad powers in the company’s operations.
Analysts said the financial conglomerate is preparing for the worst and taking steps to strengthen its capital positions.
MNC is selling one of its best divisions “so the company survives no matter how bad things get,” said David S. Penn, a bank analyst for Legg Mason Wood Walker.
