After months of turmoil, there are signs that Banc One Corp. is positioning itself to be a major deliverer of investor services.
The Columbus, Ohio-based banking company's retail and institutional investment services had suffered a setback with the resignations of several top-level executives last summer, according to industry insiders.
Now Banc One has hired four new executives and charged them with strengthening the company's effort to market custody and corporate trust services, as well as boosting outside sales of its proprietary mutual funds.
Some bankers and experts say the new appointments are a signal that a year-long reorganization effort may finally be taking root at the $90 billion-asset company.
Banc One has "been streamlining their functions and they've put the brakes on their aggressive growth. I think that now they're trying to get a handle on distribution and focusing more" on existing lines of business, said Ellen M. Landry, a consultant with Cerulli Associates, Boston.
Banc One's effort to bring its 65 bank franchises under one management structure, begun last year, has been hamstrung by personnel defections, many coming from within the bank's investor services and retail brokerage units.
Geoffrey A. von Kuhn, head of Banc One's institutional investor group, says "the bank is getting its act together" and is counting on the expertise of its new executives to help give a competitive edge to areas of business that were lacking direction before.
Gary C. Horby, formerly with Fidelity Investments, has become managing director in charge of marketing the company's One Funds outside the bank channel. Managing director Christopher E. Kulas, a former State Street Bank and Trust marketing director, is responsible for building up custody and corporate trust business.
Two other key posts have been filled by Bankers Trust alumni. Daniel C. Mueller has been named managing director for the eastern sales region, and William N. Natsis custody sales executive. The four new executives will report to Phillip E. Chambers, senior managing director of national sales.
Officials hope to leverage Banc One's 1,400 branch offices to provide faster and more flexible service to corporate trust and custody customers.
"We think that clients will like the idea that we will have someone right there that can service them, instead of having to call out to New York, or Chicago," Mr. von Kuhn said. "Our goal is not to become a Bankers Trust where we get so large that we become unresponsive."
The banking company will be redeploying some current employees into the areas overseen by the new executives, and will be hiring more personnel in the next few months, Mr. Chambers said, though no details were made available.
However, Banc One faces tough competition from established names in the custody business. Its regional rival Northern Trust Corp., Chicago, is one of the largest custodians in country with more than $500 billion of assets under custody. Banc One has some $130 billion, of which $9.5 billion come from its proprietary One Funds.
Sheila A. Penrose, executive vice president in charge of corporate and institutional services at Northern Trust, expects Banc One to be a potent player in providing services to small and midsize corporate clients seeking pension management and custodial support.
But she doesn't think the banking giant poses much of a threat.
"They are one of a number of organizations that do a good job of working with midsize companies in their geographic region," Ms. Penrose said.
But she added that "as more of those plans go global, will (Banc One) be able or willing to keep pace with their needs."
Banc One faces another uphill battle in trying to broaden distribution of its One Funds. So far, the funds are sold only through the company's retail investment centers and trust departments.
Plans are in the works to expand the sale of the funds through qualified retirement plans, nonbank brokerages, and the company's correspondent bank network. Mr. Chambers declined to give more detail, saying only that the company has received many inquiries from third parties interested in selling the One Funds.
Only a handful of banks currently sell their mutual funds outside the bank channel, the most well-known being Chase Manhattan Corp. But while Chase has been relatively successful in marketing its Vista Funds through outside brokers, at least one expert says Banc One will have a tougher time because of its funds' performance.
The One Funds have "not had shoot-the-light-out performance, and if you have performance you can almost do anything, but without it it's an uphill battle," said Geoffrey H. Bobroff, president of Bobroff Consulting, East Greenwich, R.I.
