Credit unions that serve overseas military bases are bracing for a competitive battle with NationsBank Corp., which is expanding onto their turf.
Under a new five-year contract, the Department of Defense will pay NationsBank $502 million to set up shop on installations in Europe, the Pacific, and Panama in October. The country's fourth-largest bank already has a presence on bases in Japan and Okinawa.
About a dozen credit unions serve overseas military bases. All of them - including some that have never faced off against the aggressive giant - are trying to figure out what to make of NationsBank's bulked-up foreign presence.
"We really don't know a whole lot about NationsBank," said Michael Bergeron, vice president of marketing for Service Federal Credit Union, Portsmouth, N.H.
That will change. NationsBank will expand from 17 overseas banking branches to 125 and take over 275,000 accounts with deposits of about $875 million.
Those branches were previously run by National City Corp., Cleveland, which gained the franchise by acquiring Merchants National Bank and Trust of Indianapolis in 1992.
Though some credit unions don't foresee any new competitive threat, others think the Charlotte, N.C., colossus might play tougher than its predecessor.
"I think they'll be a much tougher competitor than Merchants was," said Stan Kryjak, chief executive of Andrews Federal Credit Union who, ironically, worked at C&S Sovran before it was acquired by NationsBank in the early 1990s. "They're a lot more creative."
Indeed, NationsBank officials have said they plan to offer special services to customers returning home, such as specialized automobile loans, mortgage assistance, and relocation help.
Ronald L. Snellings also predicted that NationsBank will be a more aggressive lender.
"If they're going to get into the loan business aggressively, there might be some concerns," said Mr. Snellings, whose credit union has branches in the Pacific and in Europe. "It all depends on how aggressive NationsBank wants to be. They have plenty of assets."
