Magazine article American Banker

Union Planters to Cut 600 Jobs on Retail Side

Magazine article American Banker

Union Planters to Cut 600 Jobs on Retail Side

Article excerpt

Union Planters Corp. said it would streamline its branches, eliminating 600 jobs.

After years of building a chain of autonomous banks, the $18.4 billion- asset company said it now wants to make the 518 branches it operates in eight states more efficient.

The reorganization is expected to save at least $15 million a year, the Memphis-based company said.

Expanded operations centers in Mississippi and Tennessee would handle many functions ordinarily performed by the branches, including deposit- related operations, loan review, credit administration, and some marketing responsibilities.

"The opportunity is to drive the efficiency ratio lower," said Jack Parker, Union Planters' chief financial officer.

It was 52.99% in the first quarter, and the company has said it would like to get it below 50%. Ratios under 50% are considered "superior," said John Pandtle, an analyst with Robinson Humphrey Co.

The announcement of streamlining plans followed the Jan. 1 consolidation of Union Planters' 35 bank charters. A federal law allowing for such changes took effect last year.

Mr. Parker said Union Planters would leave the presidents of the old banks in place. "We don't want to lose that hands-on customer service," he said.

The company is also completing its acquisition of Magna Group of St. Louis, which would add $7 billion of assets and 139 locations in Missouri, Iowa, and Illinois.

That and other pending deals would push Union Planters to $31.2 billion of assets by yearend, a 73% jump from its current size.

Though it could have cut staff earlier, "I think the recent acquisitions combined with their current needs caused them to say, 'Let's get this all done now,'" said Joseph A. Stieven, analyst at Stifel, Nicolaus & Co. in St. Louis.

In addition to centralizing some operations, Union Planters is standardizing products so that customer service can be handled by five expanded call centers. …

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