MIAMI-As banks watch a historic moment in the American financial system unfold, commercial real estate assets are being auctioned off in order to avoid fall out. Last week companies like Wachovia Corp. were looking to liquidate assets, but now that Wachovia has merged with New York City-based Citigroup Inc., all eyes are scanning for the next big bank move.
Ohio-based National City Corp. also looked to liquidate assets last week, and today was down 57% on the New York Stock Exchange. "There are a number of regional banks which may need help, either because of the weakening mortgage market or simply because of the weakening economy," Michael Sheldon, chief market strategist, RDM Financial Group, told Reuters Monday.
According to a story published by American Banker, regional banks are getting creative in trying to help themselves by selling off distressed assets. Alabama-based Colonial BancGroup, a multi-state bank holding company with $26 billion in assets, set up an office in Florida for bankers to show available residential properties for sale.
The writer identified Synovus Financial Corp. of Columbus, GA and Fifth Third Bancorp in Cincinnati as banks using online auctions and portals to offer assets to buyers. There are benefits to dumping assets quickly, according to the story, but auctioning may not be the answer for all banks. BB&T, for example, chose not to sell after holding an auction because they were disappointed with the price bids.
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