SAN FRANCISCO -- Fleet/Norstar Financial Group is not concerned about the possible merger of rivals Bank of Boston Corp. and Shawmut National Corp., says Terrence Murray, chairman and chief executive.
"We would like to see that deal happen," Mr. Murray said in an interview. "I would rather compete with one institution than seven."
Mr. Murray's comments were made here Tuesday in a presentation and subsequent interview at an investment conference sponsored by Montgomery Securities. He told analyst that New England's largest banking company would earn $55 million to $60 million in the second half of the year.
'Decent Momentum' Foreseen
That includes an expected $20 million charge for severance benefits to former Bank of New England employees. The earnings were at at the upper end of analysts' expectations.
Mr. Murray did not provide a profit estimate for 1992, but said that second-half performance should give "decent momentum" to earnings next year. Fleet's stock was trading Wednesday afternoon at $22.50, down 87.5 cents.
The expected merger of Bank of Boston and Shawmut would form a banking company that would surpass Fleet as New England's biggest banking company. Mr. Murray said he expected the merged company would prove to be a "very formidable" competitor in the long run.
Franchise in Survival Mode
Fleet has uncovered "no negative surprises" as it absorbs the three Bank of New England banks it acquired in July, Mr. Murray said. although consumer business has fallen at the units, "we have seen no irreparable harm to the franchise."
Fleet plans to close 50 of the 323 Bank of New England branches it acquired by the first quarter of 1992, Mr. Murray projected. About 3,000 of some 11,000 Bank of New England jobs will be eliminated by the end of next year, he said.
Windfall from Investments
Providence, R.I.-based Fleet, with $48 billion in assets, has also gotten a windfall from securities investments, Mr. Murray noted in an interview.
The company got about $5 billion in cash as part of the Bank of New England acquisition, most of which was invested in Treasury and mortgage-backed securities. With interest rates down, the portfolio has gained about $50 million to $60 million in value," a company spokesman said.
