Bankers Trust New York Corp. has revamped ProfitCo, its processing and investment management division, in an effort to organize the unit around customers rather than around products.
The new arrangement calls for relationship managers to sell a broad range of products to specific clients. Previously, bankers specialized in individual products like cash management and securities transfer services, selling them to a broad range of clients.
The changes, which include a rechristening of the unit as Global Assets, are seen as part of an effort by the nation's eighth-largest bank company to de-emphasize its reputation as a transaction-oriented institution.
"The pendulum is swinging back toward relationships," said Raphael Soifer, an analyst at Brown Brothers Harriman & Co., who once worked at Bankers Trust.
Reputation's Downside
Indeed, trading and corporate banking deals have transformed Bankers Trust in the past decade from a retail-oriented bank into a profitable wholesale one, but the shift also has tagged the company with a reputation as a risk-taker subject to volatile profits.
The company said Thursday that the transformation of ProfitCo into Global Assets is aimed at improving revenues not cutting expenses.
The division will be reorganized from four groups into seven, defined primarily by type of client.
A bank spokesman said no layoffs are planned as part of the reorganization.
Global Assets will continue to be led by Edward Lesser, a vice chairman, who has shepherded ProfitCo since it was created in 1984. "We're mixing and matching products to solve client problems in more creative ways," Mr. Lesser said.
Client Groups, Leaders
The new client groups within Mr. Lesser's kingdom, and their managing directors, are:
* Banks, governments, and agencies, headed by B.J. Kingdon. It will focus on international banks and governments.
* Corporations and financial institutions, which will be run by Peter E. Lengyel and will target broker-dealers, mutual funds and money managers, insurance companies, corporations, domestic governments, and market clearing houses.
* Retirement services, headed by Richard A. Marin, which will solicit sponsors of employee benefit plans, endowments, and foundations.
* Private banking, which will continue to be run by Neal F. Finnegan and serve high-networth individuals.
* Mutual fund and brokerage services, a new group headed by John L. Murphy, that will sell asset-management and brokerage services to individuals outside the private bank market.
* Investment management, which will continue to be run by H. Kent Atkins and manage money for institutions.
* Information services, headed by David K. Sias, which will sell software systems and data base products to financial institutions and develop information and third-party-processing services for various market sectors.
Only the mutual fund and information services groups will focus on selling specific products.
Division's Profits Estimated
Analysts estimated that ProfitCo earned about $133 million last year, when Bankers Trust as a whole made $667 million.
One former employee of the bank said ProfitCo was generally profitable but had become structurally unwieldy. Some of its four groups were operating too independently, the former employee said. From a marketing perspective, they overlapped each other, the source said, frequently selling similar services to identical sorts of clients.
"The company needs to reorient itself around customers," said Judah Kraushaar, a Merrill Lynch & Co. analyst who applauded the reorganization.
The renaming of the division and conferring of the title managing director on its senior managers also aligns ProfitCo with Bankers Trust's two other major areas. Its extremely profitable trading area was renamed Global Markets in the past year, and its corporate lending and equity investment area is now known as Global Merchant Banking.
