Magazine article American Banker

Hire May Put Chase on the Acquisition Trail

Magazine article American Banker

Hire May Put Chase on the Acquisition Trail

Article excerpt

Chase Manhattan Corp., which in recent years has steadily added investment banking capabilities through acquisition, may be looking for similar opportunities in retail.

Last week the company tapped David A. Coulter, former chairman of BankAmerica Corp., to take over as vice chairman and head of national consumer services, a group that makes up about a third of the company overall but has been eclipsed by Chase's strengths in corporate and investment banking.

Mr. Coulter, described by those who know him as an "analytical" leader focused more on long-term strategy than day-to-day operations, also has a track record of building through acquisition. As a rising executive at the old BankAmerica Corp., he orchestrated the purchase of Seafirst Bank, a struggling Seattle institution, in 1983, and of Continental Illinois Bank in 1994. He also helped arrange the company's purchase in the early 1980s of Charles Schwab & Co., a unit that was later sold.

Mr. Coulter said in an interview last week that he has no specific plans yet for the retail business, but that expansion was a main goal. "It's a great platform, and we will build off it," he said.

Chase already has the largest branch presence in metropolitan New York and a substantial operation in Texas. It counts 30 million customers nationwide, with businesses that range from mortgages to auto loans, credit cards, and retail brokerage. First-half revenues were $4.899 billion. Still, observers said, growth in the unit has not matched that of Chase's other businesses.

"There hasn't been a good coordination among units in Chase's retail operation, as I would expect and like to see," said Thomas Brown, president of Second Curve Capital of New York. "Retail has been underperforming expectations."

Donald L. Boudreau, whose planned retirement at yearend opened the spot Mr. Coulter is assuming, countered criticism of Chase's retail operations by saying they helped the company weather the Asian financial crisis by counterbalancing a poor showing in investment banking. Still, the retail operations are dwarfed by the global wholesale group and its processing businesses, and the company has devoted far more resources to building its investment banking operation over the last few years.

"You can argue whether that's the right prioritization," Mr. Boudreau said. "It's a debate that's healthy and ongoing."

Mr. Coulter said that in his view, Chase's operations are "very good" for now. But true to form, he left open-ended his vision of how Chase's operations might evolve. "The question is, What is the retail model of the future?" he said.

Mr. Coulter was persuaded to take the job after "four or five" conversations with William B. Harrison Jr., Chase's chairman and chief executive officer. …

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