Chemical hires executive to oversee expansion of its Geoserve operation.

Chemical Banking Corp. has appointed Yawar Shah to head a new unit that will concentrate on building the revenue of Geoserve, its corporate-services unit.

Mr. Shah, 34, has been named chief administrative officer, reporting directly to Richard Matteis, head of Geoserve. He will be on an equal footing with business line managers, acting as an"idea generator" to help the business units expand their markets, Mr. Shah said.

Chemical, which doubled the size of its fee-based business with its merger with Manufacturers Hanover Trust Co., has not yet gotten down to the difficult job of paring some product and business lines and focusing on others.

Regrouping for Growth

"Chemical has become a leader in many businesses" with the merger, said Mr. Shah. "The bank has asked me to step up to a broader role, to work on the positioning of related businesses and find the best opportunities for our franchise to grow."

Observers said that the new organization is designed to help get Chemical through the next crucial phase of its merger, in which it must face these choices in order to grow into a powerful player.

Geoserve generated $700 million in revenue in 1992, accounting for 25% of the bank's noninterest revenues.

"One of Chemical's biggest concerns now must be to wring out maximum savings" from the merger, said one bank operations executive familiar with Geoserve, who requested anonymity.

Overall, observers give Chemical high marks, saying it has done a good job of retaining customers and has avoided technical problems in consolidating its fee-based businesses.

Consolidation on Track

"Clearly they're on schedule with the nuts and bolts of the merger," said Raphael Soifer, a bank analyst with Brown Brothers Harriman & Co.

However, Mr. Soifer said, Chemical shares the difficulties that other New York banks - such as Chase Manhattan Corp. and its Infoserv unit, and Bankers Trust Co.'s Global Assets unit - have in expanding their fee-based businesses. "All the New York-based firms are relatively high-cost producers," he said.

Two New Units

Mr. Shah has risen rapidly at Chemical since the merger with Manufacturers Hanover. Last year, he was promoted to general manager of global funds transfer and trade services for Geoserve.

In his new capacity, Mr. Shah will head five units with a total of over 100 employees. Two new units, strategic planning and quality program management, are being created, to be filled both from with the bank and from outside.

Mr. Shah will also head three established functions - finance and control, human resources, and marketing for the Geoserve unit as a whole. And Mr. Shah will act as Chemical's representative at Swift, the international interbank messaging network; the New York Clearing House Association; and the Federal Reserve.

Although Mr. Shah has experience as a business line manager, the new position will give him greater exposure at higher levels of the bank, said a banker who asked not to be identified.

Before joining Chemical in 1987. Mr. Shah worked for three years at Booz Allen & Hamilton's New York financial services practice. He received an Master of Business Administration from Harvard Business School as well as an undergraduate degree from Harvard.

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