Merger Puts Different Entity at Top of Banking Industry
Quinones, Eric R., THE JOURNAL RECORD
The aptly named NationsBank and BankAmerica took a giant leap for the banking industry Monday in a $62.8 billion merger creating the country's first coast-to-coast bank.
In the heart of the new No. 1 American bank's territory, another giant also was born as Banc One and First Chicago NBD announced a $28.8 billion merger to create the Midwest's most dominant bank.
NationsBank is the second-largest bank operating in Oklahoma, with $4.3 billion in assets. Banc One, which operates Bank One, is the third largest with $2.4 billion in assets. The two deals come just a week after Citicorp and Travelers Group said they would combine their sprawling banking, insurance and brokerage businesses into the nation's biggest financial company. The latest mergers increase the pressure on American banks still without partners in the race to provide broad financial services, and also raise expectations of mergers going global. "This is the first giant stride to bring both coasts together under one banking franchise," said Michael Ancell, a banking analyst at St. Louis investment bank Edward Jones. "Everybody knew it was coming, but when it finally happens it's kind of a breathtaker." The mergers fueled speculation about future deals to create banks with branches on both coasts, with mid-sized banks continuing to be absorbed. Among major banks, San Francisco-based Wells Fargo and Seattle-based Washington Mutual were seen by analysts as potential targets. "There's no doubt there will be more transactions like this," said Corey Yulinsky, who follows the industry for Mercer Management Consulting in New York. "We are going to see some really mega- institutions (and) some small community banks." The BankAmerica-NationsBank merger would be the second-largest corporate marriage ever behind the planned $74.4 billion Citicorp- Travelers union, to be called Citigroup. BankAmerica and NationsBank would have $570 billion in combined assets, surpassing Chase Manhattan as the biggest U.S. bank. In addition to setting the stage for a spate of catch-up U.S. mergers, the deals are seen as giving the newly grown banks more power to expand overseas. The new Citigroup and BankAmerica have strong overseas businesses, but America's largest banks are still behind Japan's Bank of Tokyo-Mitsubishi and the proposed United Bank of Switzerland in the global ranks. …