Wells, Banc One Give Analysts Upbeat View of Their Prospects

The consensus is that banks and thrifts are increasingly "revenue-challenged" as they find it harder to achieve growth against nonbank competition.

But top executives of several leading banks, including Wells Fargo & Co. and Banc One Corp., painted a decidedly different picture of their own companies' prospects in presentations at a Montgomery Securities financial institutions conference here last week.

The audience of about 200 was an important one, since it included portfolio managers and bank stock analysts for such influential investors as Fidelity Investments, Wellington Management Co., Tiger Capital Management, and Kohlberg, Kravis & Roberts. Some seemed skeptical of many of the presentations.

"They all seem to be doing the same thing," one bank stock analyst for a big mutual fund company said privately. "Only time will tell who will be successful and who won't."

The most futuristic pitch came from Wells executive vice president Dudley M. Nigg, who oversees the San Francisco-based company's electronic banking services. Mr. Nigg avoided discussion of the pending merger with First Interstate Bancorp, and the company's near-term prospects, saying they had already been discussed in great detail.

Instead, he warned that bankers who refuse to confront technological change could quickly lose their position as financial intermediaries. He then asserted that Wells is doing everything it can to avoid that fate by pursuing the "bleeding edge" of technological innovation.

As evidence of Wells' forward-looking stance, he showed a promotional video about its tryout of a stored-value payment card now taking place in San Francisco. He also showed an image of a home page on the World Wide Web that he said would be used in the next few months to launch a personal computer home shopping service.

"This conference is about the ability to make money in the future," he said. "Not necessarily next week - you all know very well that Wells Fargo will make lots of money next week or next year. The question is, how are we going to make money in 1998, or 2005, when this all exists and people are playing and it is no good any more to say, 'We'll figure it out.'"

Other bankers focused more on near-term means to increase revenues. For instance, Craig J. Kelly, senior vice president of Columbus, Ohio-based Banc One Corp., said his company is expecting impressive returns from a series of initiatives in retail banking.

For instance, Banc One plans this year to introduce a uniform line of deposit products for all its bank subsidiaries. This is in line with a change now in progress from a decentralized, regional management structure to a centralized one, based on lines of business.

Included in the new deposit offerings will be a low-fee checking account in which customers are charged $2 if they visit a teller. Banc One began quietly testing the account in two markets last fall, he said.

Banc One also is planning to roll out a retail distribution model throughout the company. It is being tested in Arizona and soon will be brought to Utah and Colorado.

As part of the Arizona test, the bank has closed more than 40 traditional branches in the past year and opened a similar number of limited-service supermarket branches, plus eight automated kiosks from which people can communicate with bankers by telephone and computer links.

Banc One plans to have a total of 110 traditional branches, 91 supermarket branches, and 55 automated kiosks in the state by 1997.

The Ohio company expects this effort, along with an increased focus on telephone banking, to reduce the number of teller transactions handled manually in Arizona to 12 million in 1997, from 43 million in 1994. The program is expected to yield pretax cost savings of $74 million and revenue growth of $18 million in the bank's western region in 1997.

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