Magazine article American Banker

Fleet Financial Hints at Marriage of Equals

Magazine article American Banker

Fleet Financial Hints at Marriage of Equals

Article excerpt

FLEET FINANCIAL GROUP Inc. is going public with ambitious profit and expansion goals that are raising expectations of a big merger for the Rhode Island-based superregional.

A combination with a bank of equal size, possibly one outside the Northeast, could occur within the next few years, Terrence Murray, Fleet's chief executive officer, told analysts last week. Within the next several months, he added, Fleet is likely to announce several small acquisitions.

At a farewell dinner for John Flynn, who is retiring as Fleet's chief financial officer this summer, Mr. Murray and other executives also laid out an aggressive profit plan built around a cost-cutting program to be implemented later this year.

By trimming Fleet's efficiency ration to 60% within two years from the high 60s today, Mr. Murray said, the company can boost its return on average assets 30 to 50 basis points from its current level of about 1.0%.

Analysts expect staffing to be cut in a areas such as Fleet's Recoll real estate workout unit and in credit management. Fleet has aggressively sold some $515 million of problem assets in the past few years, reducing nonperforming assets to 3.6% of loans at March 31 from 7% in 1990.

Analysts who attended the dinner said Mr. Murray is intent on diversifying his asset base and is searching for partners outside the Northeast who have strong fee-income businesses. Fleet's $47 million of assets are concentrated primarily in Providence, R.I., Boston, and New York's Long Island. …

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