Ralph M. Carestio, who led an ambitious push by Keycorp into fee-based businesses, has abruptly resigned.
The move follows a decision by Cleveland-based Keycorp to sell its mortgage banking unit, the company's single biggest generator of fees. The sale decision, which reportedly sparked a heated internal debate, was seen as a blow to Mr. Carestio.
The company is "moving in a direction that's a little bit off of my primary interest," Mr. Carestio said in an interview.
Mr. Carestio, who plans to leave Keycorp by yearend, has been one of the banking industry's most forceful advocates of fee businesses. As executive vice president, he oversaw not only mortgage banking but also mutual funds, insurance, trust, and brokerage.
He was given authority to expand those operations after the banking company's merger last year with Society Corp. Among his plans: to keep the premerger promise of increasing fee income to at least 30% of net income by 1997, up from 14% last year.
Mr. Carestio's resignation is the most recent in a series of departures from the fee income group. John Mastriani, who headed up Keycorp's brokerage operations, left the bank last month. Jeffrey Evershed, the company's mortgage chief, resigned in May. And Mary Kay Stern, head of trust for Society Corp. left last year, soon after the merger was announced.
The departures do not signal an end to Keycorp's push for fee business, analysts said.
"Any time you lose a key employee it's a concern, but Keycorp has developed a very solid cadre of senior managers," said Frank J. Barkocy, banking analyst at Advest.
Nonetheless, Keycorp does appear to be rethinking its approach to fee businesses. Specifically, Mr. Barkocy said, the company is shifting its concentration to mutual funds and brokerage, taking advantage of its 1,300 branches in 13 states.
The decision to sell Keycorp Mortgage, announced this month, was not unanimously popular at the bank, sources said. Some observers say that executives who had been with Society were the strongest proponents of a sale; most of the mortgage unit had been part of Keycorp.
"There seemed to be a bias against that particular business" among ex-Society executives, said a source familiar with the situation.
According to some sources, discussions grew especially tense at a meeting of high-level executives. But a Keycorp spokesman and Mr. Carestio both denied there was dissent over the move.
The mortgage unit, if sold in its entirety, could fetch $400 million to $500 million, according to SNL Securities. Keycorp has retained Salomon Brothers to handle the effort. Keycorp services $28 billion of mortgages.
The bank company has not decided exactly what portions of the mortgage banking unit might be sold, according to Henry Meyer, a senior executive vice president.
Indeed, he said, "we are not hell-bent to sell this. If we don't get the right price, we won't sell."
Mr. Carestio, who had been at Keycorp since 1991, acknowledged that the decision to sell the mortgage company played a role in his resignation.
"It seems like an O.K. time for me to make the break," he said.
Oversight of the fee business will not be given to a single successor. Instead, the duties will be performed by Keycorp's two chief banking officers, Gary Allen and Henry L. Meyer 3d, and by chief financial officer James W. Wert.
