Citicorp has hired John J. Egan 3d as head of trust and global custody services, replacing Thomas H. Lovell Jr., who resigned last month.
Mr. Lovell, who came to Citicorp after eight years at Drexel Burnham Lambert, abruptly left the banking company in mid-September after just two years. At Citicorp, he had headed North American investor services, which includes domestic custody, global custody, master trust, securities lending, and other businesses.
Competing from Behind
Analysts said Citicorp has been playing catch-up with competitors who have invested heavily in creating systems that can report a complete picture of a customer's trust portfolio.
In the United States, Citicorp has faced tough competition from smaller, more focused rivals, such as State Street Boston Corp. and Northern Trust Co.
Mr. Egan, who formerly headed global custody and trust services at Manufacturers Hanover Corp., lost much of his responsibility after the bank's merger with Chemical Banking Corp.
He takes over as vice president and business head of the Citicorp unit, effective Nov. 1. Mr. Egan will report to Carlos Salvatori, division executive, worldwide securities services.
Move Called Voluntary
The businesses that Mr. Egan headed at Chemical -- primarily broker/dealer clearance, securities lending, and master trust -- have been folded into the global securities services division headed by Jeremiah F. O'Leary.
Although Mr. Lovell's departure was sudden, both he and the company said it was voluntary. "I'm looking forward to getting back to the other side of the street," said Mr. Lovell. "The investment banking environment is more entrepreneurial."
Mr. Salvatori credited Mr. Lovell with turning around the business during his stint at Citicorp. Mr. Lovell said he took revenues from $120 million to $160 million.
The executive moves came just a few weeks before Citicorp is to decide on what technology companies will supply a multimillion-dollar system for processing domestic securities.
The system will allow bank employees, and eventually customers, to initiate transactions and see the status of that transaction on an up-to-the-minute basis.
Citicorp is in the middle of the pack in developing such a system -- aggressive companies such as Bankers Trust New York Corp., State Street Boston, and Morgan Stanley & Co. have already poured millions of dollars into upgrading their trust and global custody reporting systems.
"Trust and global custody is an extremely competitive area," said Raphael Soifer, an analyst at Brown Brothers Harriman & Co. "Citicorp has an advantage in terms of its location and its network, but it hasn't had a lot of money to spend on systems. You have to question how competitive Citicorp is right now."
Dueling Bidders
Citicorp has spent the last 15 months working on the specifications, according to Mr. Lovell, and it could complete the system in 1994. Citi will choose between systems assembled by International Business Machines Corp. and Digital Equipment Corp.
"This is the technology that will allow us to bring state-of-the-art services for pension funds, master trust, and defined-contribution products," said Mr. Salvatori. "We'll then be able to go after those markets with the technology we've acquired."
The system will evolve into a "client/server" arrangement, Mr. Salvatori said, in which IBM mainframes or clusters of Digital Equipment machines will share data with personal computers.
Linking Systems Globally
Citicorp is also linking two global custody systems, one developed in Britain and the other in the United States.
Eventually, Citi will link its domestic and global systems so that detailed reporting can be done on overseas investments where that is required.
