Magazine article American Banker

Survival Depends on Having $10 Billion in Assets, Bankers Say

Magazine article American Banker

Survival Depends on Having $10 Billion in Assets, Bankers Say

Article excerpt

Survival Depends on Having $10 Billion in Assets, Bankers Say

CHICAGO -- Midwest bank holding companies will need to have assets of at least $10 billion by 1990 to survive the acquisition binge and remain independent, said the chairman of a growing Milwaukee banking company.

George R. Slater, the chairman and chief executive officer of the Marine Corp., said his company, which completed two acquisitions in recent years, is looking to reach its goal by acquiring banks in other states.

Donald N. Brandin, the chairman and chief executive officer of Boatmen's Bancshares Inc., St. Louis, agrees that survival depends on having at least $10 billion in assets. However, he says, the companies should be that size today.

Mr. Slater and Mr. Brandin gave their predictions last week at a Midwest interstate banking conference sponsored by the Bank Administration Institute.

While the two chairmen disagree on the timing for reaching survival size, they agree that the banking industry will continue to consolidate through mergers and acquisitions. Also, they predict, some giant, superregional banking companies will emerge.

Mr. Brandin estimates that within five years, 30 Midwest bank holding companies will have assets of $50 billion. There are none that size today in the region, which consists of Minnesota, Wisconsin, Missouri, Indiana, Michigan, Ohio, Illinois, and Iowa. The First Chicago Corp., with assets of about $39 billion, is the largest.

By the end of 1990, Mr. Slater says, the region will boast 20 independent bank holding companies with assets exceeding $10 billion. Of the 20 superregionals, five will have more than $40 billion in assets; five will have assets between $20 billion and $40 billion, and 10 will have assets of $10 billion to $20 billion.

In addition, of the 5,000 existing Midwest banks, Mr. Slater says, only 3,500 will be around by the end of 1990. …

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