Magazine article American Banker

New Empire Faces a Tough Balancing Act

Magazine article American Banker

New Empire Faces a Tough Balancing Act

Article excerpt

The combination of Keycorp and Society Corp. creates the closest thing yet to a nationwide bank, bringing together nearly 14,000 banking offices in 18 states under a single holding company headquartered in Cleveland.

Managing such a far-flung network will require a delicate balance of strong local autonomy for the new Keycorp's 14 banking subsidiaries and highly efficient centralized administration and operations in Cleveland, say top officers at Keycorp and Society.

The formula combines Society's penchant for centralized administration of core businesses such as investment management, with Keycorp's decentralized approach to distributing retail banking services nationwide.

Making It |User Friendly'

"We will probably continue [centralization]) in some form or fashion," said Robert W. Gillespie, chairman and chief executive officer of Society Corp., who will be president and chief operating officer of the new Keycorp for the next two years.

"But the trick is to make it user friendly for thousands of employees to get their hands on our products and services and deliver them to customers," Mr. Gillespie told securities analysts on Monday. "Our focus is delivering products through a decentralized banking organization."

Of the two organizations, Society probably faces a bigger challenge in becoming more streamlined. At Monday's briefing for analysts, Mr. Gillespie quipped that the bank's matrix-style management structure, when diagrammed, resembles the control panel of a transcontinental airliner.

"I haven't had the courage to show the management chart to Vic yet," joked Mr. Gillespie, referring to his new boss, Victor J. Riley, who will be the chief executive of the new entity until 1995, when Mr. Gillespie will take over. Mr. Riley will continue as chairman until 1998.

In the Keycorp Mold

The new banking company, which will be the nation's 10th-largest in terms of assets and the sixth-largest in terms of branches, will operate much the same way the old Keycorp did, said Mr. …

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