Magazine article American Banker

A Lean Wachovia in for More Belt-Tightening

Magazine article American Banker

A Lean Wachovia in for More Belt-Tightening

Article excerpt

Wachovia Corp. has joined the banking industry's cost-cutting craze, even though it's already one of the most efficient banks in the nation.

Executive vice president Walter Leonard, who heads the company's operations subsidiary in Atlanta, is in charge of a team of executives searching for management overlap and redundancies in Wachovia's three-state operation.

The three-month review, scheduled to be completed by mid-April, is expected to result in some employee layoffs.

"Overall, we would expect to have a lower-cost, more efficient organization, and that means probably fewer jobs," Mr. Leonard said in an interview Monday. "How we get there, whether that's through attrition or redeployment or whatever, has not been determined."

The review targets only salaried managers; hourly employees are not affected. Andersen Consulting has been hired to assist in the effort.

News of the review came to light last week in the Charlotte Observer, which had obtained an internal memo written by Mr. Leonard and dated Jan. 11.

According to the Observer, the memo said the review will focus on "management positions within every Wachovia subsidiary, business function, and support area."

It said the company aimed to "improve productivity, eliminate redundancies where possible across state and functional levels, dissolve unnecessary boundaries between business lines, and support a customer- focused sales organization."

Wachovia's efficiency ratio, 53.7% at yearend, is already among the best in the industry. It compares, for example, with an average of 61.41% for Wachovia's peer group, the Keefe, Bruyette & Woods Inc. index of 31 regional banks with assets over $25 billion.

Wachovia, based in Winston-Salem, N.C., has $39 billion of assets.

Mr. Leonard denied that the review, and resulting reorganization, is directed at specific expense-saving targets. …

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