Banking Industry Feels Impact of Consolidation

Article excerpt

One effect of contraction in the financial services industry is an increase in the number of people who have been squeezed out of their jobs as duplication is eliminated and economies of scale allow larger organizations to operate more efficiently with fewer people.

Though the consolidation wind seems to have just begun blowing in Oklahoma, the state had 4.7 percent of all the jobs lost nationwide at banks and savings and loans between the second and third quarter of 1992.

The state had a net loss of 346 jobs during the three-month period which ended in September, according to a report from Bauer Financial Reports Inc. of Coral Gables, Fla. This compared with a total job loss of 7,344 for the nation as a whole.

Employee totals for both banks and thrifts were included in the data to reflect the movement of employees from savings and loans to banks.

Oklahoma's banks and thrifts had a total of 18,023 full-time equivalent employees at the end of September, down 1.9 percent from 18,369 at the end of June.

Ten or so mergers were completed in Oklahoma during the fourth quarter of 1992, so their effects were not included in the figures.

Bauer reported that the pace of job eliminations nationwide seemed to have slowed in the third quarter. The company said that banks and thrifts had cut 56,595 jobs for the 12-month period which ended in June 1992. That figure represented a quarterly average cut of 14,149 jobs.

Oklahoma's combined job-change totals for banks and thrifts were not available for that time period, but the state had an increase of 530 jobs at banks from the end of June 1991 to the same period in 1992. Those figures do not take into account the number of jobs that came into the banking industry from savings and loans, however.

Oklahoma generally is seen to be a little behind the rest of the country in industry consolidations, mainly because of weak performance due to the economic problems of the 1980s. Now that situation has turned around and profitability is widespread, the pace of consolidations in the state is expected to pick up speed. How that affects jobs, however, remains to be seen.

Bauer reported that the region with the largest reduction in bank and thrift jobs was the Northeast, which cut 6,719 jobs during the period. Other regional employment changes were: Southeast, down 1,244; Central, down 1,508; Midwest, up 317; Southwest, down 288; and Western, up 2,098.

The two states with the largest individual cuts also were from the Northeast: New Jersey lost 3,240 and New York lost 2,567. Florida came next with a net loss of 1,662 and was followed by Washington, with a drop of 1,619. . . Oklahoma banks continue to receive high marks by independent rating firms.

Wakefield, Mass.-based Veribanc Inc. assigned its highest blue ribbon rating to 122 of Oklahoma's banks, based on third quarter 1992 data. Of those, 26 were in central Oklahoma and 13 were based in Oklahoma City.

Bauer Financial Reports assigned its highest rating to 164 of the state's banks and to 11 banks in the metro area.

Veribanc's blue ribbon rating is a step above its high safety and soundness rating of green with three stars, which indicates profitable banks with equity capital of at least 5 percent of assets.

Veribanc also noted that 11 Oklahoma City area banks had received the blue ribbon rating for at least eight consecutive quarters. …