Academic journal article ABA Banking Journal

"The Unbanker" on Midsized Banks' Future

Academic journal article ABA Banking Journal

"The Unbanker" on Midsized Banks' Future

Article excerpt

Norwest Corp.'s CEO Dick Kovacevich has taken the midwestern bank holding company far on contrarian thinking, so much so that a December 1996 ABA Banking Journal cover story dubbed him "The Unbanker." A month before the BankAmerica/NationsBank merger announcement, Norwest, at $96.1 billion in assets, would not have been on most peoples' list of midsized banks; yet in the wake of news of that deal, some were classifying Norwest as "midsized." We asked Kovacevich for his view on banks in the "middle."

Unlike many of the bankers and analysts interviewed for this report, Dick Kovacevich thinks that size does matter--in part.

"Up to a certain point, it matters," says Kovacevich. "Beyond that point, it can actually be a negative."

To him, size mailers in that he believes a bank must be large enough to be able to invest in a wide variety of product and service capabilities to meet the present and future demands of the market. But there can come a point where growth just for growth's sake gets in the way.

"You get bigger by being better," says Kovacevich. "You don't get better by being bigger."

That said, Kovacevich believes that $50 billion is a good asset target for a midsized bank to grow towards. …

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