Magazine article American Banker

1st Bank Says Deal Won't Hurt Customer Relations

Magazine article American Banker

1st Bank Says Deal Won't Hurt Customer Relations

Article excerpt

First Bank System Inc.'s chairman, John F. Grundhofer, said Friday he is confident that doubling its size through the acquisition of U.S. Bancorp would not disrupt existing customer relationships.

That's because the company has invested in technology that can accurately track customer satisfaction in addition to profitability, he told a Federal Reserve Bank of Chicago conference on bank structure and competition.

First Bank would increase to $70 billion of assets and would have a sizable presence in the Northwest through the acquisition of Portland, Ore.-based U.S. Bancorp. Mr. Grundhofer declined to speak specifically about the pending merger, which is expected in the third quarter, citing the blackout period of silence required before such acquisitions.

But couching his answer in his presentation about the importance of technology, Mr. Grundhofer said his company has been much more responsive to customers since it moved to a centralized operation, a process that began in 1990 when he joined the bank.

"Customer satisfaction has been higher since we've been centralized than it ever was when we were decentralized," Mr. Grundhofer said.

Although the company is legally organized as seven banks, it has from a technological standpoint been operating as a one-bank company for several years, he told the audience of about 300 bankers, economists, and regulators. "We had a single bank before most banks were thinking about it," Mr. …

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