Michigan National hires Tandon to aid cost cutting.

Citing an "immediate need to significantly improve performance," Michigan National Corp. on Wednesday said it hired Tandon Capital Associates Inc. to assist with an accelerated efficiency campaign.

The $10.1 billion-asset banking company, based in the Detroit suburb of Farmington Hills, said it wanted to lower its ratio of operating expenses to operating revenues to below 60% by the third quarter of 1995.

That compares with an efficiency ratio of 77% in the first quarter of 1994, according to figures published by Keefe, Bruyette & Woods Inc.

Analysts responded cautiously to the announcement, citing uncertainty about whether the revised cost-cutting goal could be achieved.

Analysts Uncertain Plan Will Work?

"That's quite a stretch from where the company is right now," said Henry C. Dickson, an analyst with Smith Barney Shearson.

Michigan National's stock fell by 75 cents on Wednesday, closing at $75 per share.

On an annual basis, the newly-announced efficiency campaign would boost pre-tax income by $65 million, Michigan National said, or more than $2.50 per share after taxes. That figure is sharply higher than the $35 million cost-cutting target unveiled earlier this year by Michigan National, which posted a 0.74% annualized return on assets in the first quarter.

Sharply criticized for its lagging financial performance, Michigan National has been casting about for ways to boost profitability. But speculation about a possible sale erupted recently after the company retained Keefe, Bruyette & Woods Inc. to act as its adviser.

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