Private Banking: NationsBank Targets N. Y. With Private Banking Push

Determined to gain a foothold in the Northeast, NationsBank Corp. has quietly set up a New York office catering to the wealthy.

It is the first U.S. private banking office for NationsBank, the nation's fourth-largest bank, outside its home base in the Southeast.

The action is expected to heat up the already tense competition in the New York private banking market. NationsBank, with $183.9 billion of assets, has been targeting the customers as well as the employees of such rivals as Chase Manhattan Corp., Citicorp, and Bank of New York Co.

Analysts said NationsBank would have its work cut out for it.

"They're going to have a heck of a time trying to get business, because banks in New York tend to be pretty good in terms of service and have been here for a long time," said Francis X. Suozzo, an analyst at S.G. Warburg & Co.

Still, analysts agreed, the move makes sense, given the Charlotte, N.C.- based banking company's aspiration to establish itself nationwide.

"New York is the natural place for any bank that wants to have a national presence. There is a lot of wealth here," said Dennis F. Shea, an analyst at Morgan Stanley & Co., New York.

NationsBank's New York office, which was opened without fanfare in March, is staffed by four executives - two of whom were recruited from Citicorp.

Stephen A. Sanak, who is leading the start-up effort in New York, said he expects the staff to grow as business picks up.

"We want to do as much good business as possible," Mr. Sanak said in a telephone interview. "No bank wants to cap what their market should be. If someone said they only wanted 2% (of the market), I'd question why they're in business at that point."

He said he expects to make solid gains in market share. "Just because we're not headquartered in New York doesn't mean it's not an important market for us," he said.

The office is targeting clients with at least $10 million of net worth and upward of $1 million of investable assets, according to Mr. Sanak, who until recently headed NationsBank's Fort Lauderdale, Fla., private banking unit.

Mr. Sanak said the "timing was just right" to open a private banking office in New York. The office, he said, will offer loans to well-heeled clients, as well as allowing the company to cross-sell investment services such as asset management.

In addition to Mr. Sanak, the unit is staffed by Mark Antweil, who came to New York from NationsBank's Palm Beach, Fla., office, and by two former Citicorp private bankers, Jane R. Heller and Rosemary Vrablic, both of whom were based in New York.

Warburg's Mr. Suozzo predicted that the unit would evolve into a wider operation. "There is no question NationsBank is one of the most aggressive banks in the U.S.," he said. "Their objective is to become over time one of the leading investment banks among the U.S. commercial banks."

Though company officials declined to disclose how many accounts the private bank manages, the business is clearly important to NationsBank. In addition to its New York office, the banking company has 25 private banking offices in nine southern states and the District of Columbia. It also has nine private banking offices overseas, primarily in Latin America.

NationsBank's 1994 annual report noted that the private banking business had grown "dramatically" in the preceding two years. Client rosters grew 15%, the bank said, and lending showed 26% annual growth for both years.

In the same report, NationsBank stated that sales of investment products through the private bank had grown 120%, as a result of stepped up efforts to increase the asset management business.

Though Mr. Sanak's operation has been in business since early March, NationsBank chose to keep it under wraps.

When contacted last Friday, a NationsBank spokesman initially said he "didn't know that office had opened yet."

After some prodding, the bank confirmed that the private banking shop had been open nearly two months. A spokeswoman said NationsBank "wanted to make sure" the operation was viable before publicizing it.

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