KeyCorp began to lay the foundation for its massive restructuring this week, announcing plans to close 22 branches - and eliminate 100 jobs - in Washington and Oregon.
The $65 billion-asset Cleveland company said it would close 12 Washington offices, consolidating nine into other offices and replacing three others with automated teller machines. In Oregon, KeyCorp will close 10 offices, consolidating nine and replacing one with an ATM.
In all, KeyCorp said it anticipated laying off only 13 people in Washington and Oregon, eliminating the rest of the positions through attrition.
The two states make up most of KeyCorp's Northwest region, which has $9.2 billion in deposits and 268 offices.
Chairman and chief executive Robert Gillespie has said the restructuring is part of a plan to reduce KeyCorp's efficiency ratio from 61% to 55% by yearend 1997. KeyCorp said last week it would reduce its 28,000-member work force by more than 10% and close or sell 280 branches.
However, the company said it is not pulling completely out of Washington or Oregon. "This doesn't mean that we will leave entire districts or significantly lessen our commitment to any of our customers in the Northwest," said Ralph K. Holliday, president and chief operating officer of KeyBank of Washington.
A spokesman for KeyCorp in Seattle said no decision has been made about KeyCorp's presence in Alaska, where it holds $687 million in deposits in 20 branches. "It's always a possibility," spokesman Rob Gill said of a possible sale of the company's bank there. "The way we're looking at it, for any divestiture you have to find the appropriate buyer."
KeyCorp has for the past couple of years boasted that it is the only bank to span the United States from Maine to Alaska. Fred Cummings, an analyst with McDonald & Company Securities in Cleveland, said in light of the branch reductions, KeyCorp is not likely to continue making that claim.
"Their focus is no longer on growth, it's profitability," Mr. Cummings said. "They'll still be a national company, but not from a deposit perspective."
Sales of 140 branches are expected to be announced over the next year. Consolidation announcements in other KeyCorp regions, such as the Northeast, Great Lakes and Rocky Mountains, will continue over the next six weeks, company officials said.
Mr. Cummings said KeyCorp will likely make the heaviest cuts in areas that, like the Northwest, have low average deposits per branch.
