ONE giant merger after another is shaking the United States banking
The latest, between Chemical Banking Corp. and Chase Manhattan
Corp., was announced yesterday. The combined institution, to take
the Chase name, will be the largest bank in the nation with almost
$300 billion in assets.
That deal dwarfed two other major mergers also announced yesterday:
* Cleveland-based National City Corp. has agreed to buy Integra
Financial Corp. in Pittsburgh for $2.1 billion.
* In St. Louis, Boatmen's Bancshares Inc. announced plans to buy
Fourth Financial Corp., a Wichita, Kan.-based institution, for $1.2
"We have too many banks," says Paul Nadler, a professor of finance
at Rutgers Graduate School of Management in Newark, N.J.
The US has more than 10,000 commercial banks, plus thousands more
thrift institutions, investment banks, and other financial
institutions that can do some of the same business activities as
"We will see more mergers," says Colleen Pantalone, a finance
professor at Northeastern University in Boston. "It is a natural
result of deregulation and an attempt to be competitive
"The financial-services industry is in the midst of the greatest
period of consolidation in its history, and we are seizing upon a
truly unparalleled opportunity to create a premier global
financial-services company," stated Walter Shipley, chairman and
chief executive officer of Chemical. He will take the same position
in the merged bank.
The two banks figure the merger will result in a cost savings of
$1.5 billion within three years, or about 16 percent of combined
1995 operating expenses. Some 12,000 positions from a combined
staff of 75,000 located in 39 states and 51 countries are to be
"What am I going to do to get jobs for my students?" asks Professor
Bank employment in general has been declining across the nation,
partially because of the arrival of automatic-teller machines and
computerization in general.
Mergers, by eliminating jobs, are "hard on people," adds Nadler.
But they "make sense. This is where banking has to go."
Mergers, however, may even be helpful to some small banks. "Giant
mergers, such as this one, provide an opportunity for independent
banks ... to provide a variety of services to business and
individuals who may feel disenfranchised by large banks," says
Edward Liebenstein, executive vice president of Sterling National
Bank and Trust Co. …