Banc One Says Painful Shift in Focus From Wholesale to Retail Is

Banc One Mortgage Corp. has completed a transformation of its business strategy.

Jeffrey P. Gaia, president of the Columbus, Ohio, lender, said in an interview that the mortgage bank had refined its new focus on retail originations. And he said that the worst was over in the "painful" transformation from portfolio-style lender to traditional mortgage bank.

In the process, Banc One has decided it would no longer use volume of production and the size of its servicing portfolio as markers for success. Instead, profits are the guiding force, he said.

Like other lenders, Banc One suffered through a harsh 1994. The lender's originations fell 38% last year, to $4 billion. This after Banc One's originations had rocketed from $1.6 billion to $7.1 billion in two years ending in 1993.

Such a rocky road compelled a new strategy, Mr. Gaia said.

Until six months ago, it had held on to most of its loans and it also had a wider geographic reach.

But Banc One has refitted its staff to be more oriented towards retail originations, hired what Mr. Gaia called "more productive" loan officers, and dramatically scaled back its wholesale operation.

The staff has been shrunk 30% since last June, to 1,393.

In March, William B. Naryka, who had been with Banc One Investor Services Corp., became chief financial officer with the goal of reducing excess costs and capacity.

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