Fleet, Banc One seen likely to feel pressure for deals.

The proposed merger of Keycorp and Society Corp. surprised Wall Street and has prompted the investment community to wonder what deals banks may do next.

"I wouldn't say contracts will be inked next week, but it gets people thinking seriously again about the industry's big picture and where they eventually fit in," said Christopher Marinac, a bank analyst in Atlanta for Interstate/Johnson Lane.

"This merger will be the laboratory," said Nancy A. Bush, an analyst at Brown Brothers Harriman & Co. "A lot of people in banking will be watching the market reaction. It will a pressure in a lot of areas,"

She believes Fleet Financial Group and Banc One Corp., which is viewed by many as the nation's premier superregional banking company, will particularly feel the pressure to find large merger partners outside their regions.

"I had persisted in believing that Keycorp would eventually sell out to Banc One," Ms. Bush said. "I was very much surprised by this announcement. It was not a combination I'd thought of, but I don't know why since it makes sense from a market extension point of view."

"This does scramble the pecking order." agreed John J. Lyons of Lyons, Zomback & Ostrowski, a New York consulting firm. "And it lends a little credence to a lot of possibilities, even outlandish rumors about big North Carolina banks making deals in New England."

Last month, shares of Fleet Financial soared after a day of market rumors that the Providence, R.I., company was set to announce a deal with NationsBank Corp., Charlotte, N.C.

NationsBank "already has the wheels turning" to repeal the Southeast Compact that would currently block such a deal, Mr. Marinac said. Keycorp's deal with Society is likely to further fuel arguments to change state laws.

Headed North?

Mr. Lyons said he believed Banc One, which has backed away from several previous chances to enter New England, must now "think again."

With few remaining large players left in that area, Shawmut National Corp., Hartford, Conn., probably offers the best fit of corporate cultures with Banc One, he said.

Similarly, PNC Financial Corp., Pittsburgh, and CoreStates Financial Corp., Philadelphia, probably feel extra pressure to make a major move.

PNC has been expected by many analysts to announce a major deal. Mr. Lyons said it is a candidate to do a "jump deal" that would go beyond the limits of its current market area in the Northeast and Midwest.

Eye on Florida

He said PNC is probably interested in Florida and, state laws permitting, in linking up with Barnett Banks Inc., Jacksonville. Barnett has denied takeover rumors in the past.

Fleet also might like to head to Florida, if possible, he said, and a merger of equals with a solid smaller superregional like Amsouth Bancorp. might provide an avenue for entry.

Of the two superregionals in Minneapolis, First Bank System Inc. seems the likelier candidate for a major move, he said. Expansion possibilities exist in several directions.

One future possibility nearby, with operations in areas of the Midwest not now covered by First Bank, is First of America Bank Corp., Kalamazoo, Mich., which Mr. Lyon said would be "a plum" for a larger bank.

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