This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7690318.stm

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
US bail-out cash buys rival bank US bail-out cash buys rival bank
(40 minutes later)
A US bank has become the first to use some of the $700bn (£440bn) government bail-out to buy a rival. A US bank has become the first to use some of the $700bn (£440bn) government bank bail-out to purchase a rival.
PNC Financial Services Group is buying National City for $5.6bn - making PNC the US's fifth largest bank by deposits with the fourth most branches.PNC Financial Services Group is buying National City for $5.6bn - making PNC the US's fifth largest bank by deposits with the fourth most branches.
Cleveland-based National City needed to be rescued after being heavily weighed down by bad mortgage debt.Cleveland-based National City needed to be rescued after being heavily weighed down by bad mortgage debt.
As part of the bail-out, the US Treasury aims to buy stakes in banks in return for capital.As part of the bail-out, the US Treasury aims to buy stakes in banks in return for capital.
And while recipients can use some of the investment for acquisitions, the aim of the controversial $700bn move was also to free up lending.And while recipients can use some of the investment for acquisitions, the aim of the controversial $700bn move was also to free up lending.
More consolidation expected
Banks have been struggling since the middle of 2007 with rising mortgage defaults and a credit crisis that has virtually frozen inter-bank lending and severely restricted lending to consumers.Banks have been struggling since the middle of 2007 with rising mortgage defaults and a credit crisis that has virtually frozen inter-bank lending and severely restricted lending to consumers.
The move by Pittsburgh-based PNC to buy National City is expected to be the first of several deals that results in consolidation in the US banking sector.The move by Pittsburgh-based PNC to buy National City is expected to be the first of several deals that results in consolidation in the US banking sector.
"PNC now becomes a major force in retail [banking]," said Bart Narter, of consulting firm Celent. "It just doubled in size for not a lot of money.""PNC now becomes a major force in retail [banking]," said Bart Narter, of consulting firm Celent. "It just doubled in size for not a lot of money."