Former Goldome Chief Cooper Urges Cost Control as Cultural Discipline for Survival-Minded Banks

American Banker, June 24, 1991 | Go to article overview

Former Goldome Chief Cooper Urges Cost Control as Cultural Discipline for Survival-Minded Banks


Former Goldome Chief Cooper Urges Cost Control As Cultural Discipline for Survival-Minded Banks

Thomas A. Cooper took the reins at Goldome in Buffalo in 1989, when the institution was awash in a sea of red ink.

Largely because of ruthless expense reduction, Mr. Cooper -- former president and cost-cutting specialist at San Francisco-based BankAmerica Corp. -- lifted Goldome into the black. In 1988, the bank posted a net loss of $119 million. By contrast, in 1990 the bank earned $37.5 million.

Nonetheless, Goldome remained starved for capital, and the Federal Deposit Insurance Corp. last month parceled out the Buffalo bank's franchise to Albany-based KeyCorp and First Empire State, also of Buffalo.

Shortly before stepping down from his post as chief executive officer at Goldome, Mr. Cooper summed up some of his accomplishments.

Many people talk about cost cutting the way they used to talk about the four-minute mile. Too often, they start by assuming that it simply can't be done.

But it has to be done. And cost cutting has to be a day-to-day cultural discipline, not a crisis mentality. The institutions that fail to recognize that fact are going to wither and die.

One problem is that bankers too often try to cut costs by going for the home run. We frequently say things like: "Let's cut the staff by 15%."

My first year at Goldome we were able to get 2,000 people out the door. But, once we completed the layoffs, expense reduction became tougher. We had to look for dimes and nickels and pennies.

It is not very sexy. But you have to look at every mundane detail.

To cut down on overhead, you have to look at such things as how to heat and light your buildings. In terms of maintenance, determine which areas of a bank need to be cleaned daily, and which need cleaning only twice a week.

Trimming Tech Costs

Look, too, at technology and the flow of information. Pin down what you are storing on hard copy, what are you putting on microfiche, and what are you saving electronically.

When I signed on at Goldome, the thinking was that we needed to buy another mainframe computer. But because we examined what was stored away on a page-by-page basis -- and discarded the waste -- we can now process twice the volume of accounts. And that's without the help of another mainframe.

On the advertising front, know your markets. Calculate the pull power of a full-page advertisement versus a half-page ad. Know your demographics: For example, find out which radio stations hit your target markets. …

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