Fitch Takes Negative Actions on 7 Banks

Citing exposure to mortgage, home equity, and residential construction lending, Fitch Ratings has downgraded National City Corp. and revised downward the rating outlooks of Wells Fargo & Co., Washington Mutual Inc., Countrywide Financial Corp., and three other large banks.The long-term issuer default rating of National City was downgraded from AA-minus to A-plus, and its short-term IDR was downgraded from F1-plus to F1. The rating outlook is negative. Fitch cited NatCity's "weakened core financial performance" and opined that its remaining mortgage banking business "is likely to remain pressured." The rating outlooks of Wells Fargo, KeyCorp, Zions Bancorporation, and Capital One Financial Corp. were revised from positive to stable because of "strong reliance on consumer lending businesses such as mortgages and home equity credit as well as exposure to residential construction," Fitch said. The same factors were cited in the revision of WaMu's outlook from stable to negative. Similar factors were also cited in removing Countrywide from Rating Watch Evolving and assigning it a negative outlook, with the additional concern that the company is repositioning its main business, mortgage banking, amid "extremely difficult conditions." Fitch can be found online at http://www.fitchratings.com.