Magazine article American Banker

Magna Consolidation in the Home Stretch

Magazine article American Banker

Magna Consolidation in the Home Stretch

Article excerpt

Magna Group Inc. of St. Louis is about to complete an unusually rapid, six-month consolidation of eight subsidiaries.

The feat is expected to contribute significant cost savings to a banking company that has recently doubled in size, to $4 billion in assets, through acquisitions.

Magna is on target to be saving $16 million a year by the end of 1994, and will probably save $18 million, according to A.G. Edwards & Sons Inc., St. Louis.

About two-thirds of the savings will come from systems consolidations, said Anthony Polini, an analyst at the regional securities firm.

The management and systems strategy that Magna is pursuing is similar to the one successfully used by Banc One Corp.: allowing affiliate banks to make independent product and pricing decisions while their performance is monitored and measured on central computer systems.

Magna expects to complete the systems consolidation next week with the conversion of its bank in St. Charles, Mo., to Magna's in-house systems.

And the holding company is in the first phase of developing an executive information system to give subsidiaries' presidents a snapshot, in graphic form, of their bank's performance against company benchmarks.

In the first phase, monthly data about loan quality are provided. Future versions of the system will give managers daily reports on loan status and on profitability data according to product and by individual customer, Magna said.

Helpful to Bank's Board

"I'm using the reports to make presentations to my board," said Kent McNeil, president of Magna Bank St. Charles, which has $220 million in assets. "They help the board look at trends in loan quality."

Some Wall Street analysts are beginning to take a second look at Magna Group, which grew to its current size with the acquisition last December of Landmark Bancshares Inc. …

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