Chase Manhattan Corp. said Thursday that it would sell its branch operations in the northern Caribbean to Virgin Islands Community Bank Corp. for an undisclosed sum.
The deal includes nine branches, $500 million of deposits, and $337 million in consumer and commercial loans on four islands in the U.S. and British Virgin Islands and on Barbados.
In addition, the $68.3 million-asset Virgin Islands bank agreed to buy 15 automated teller machines and Chase Trade Inc., a unit that provides services to U.S. exporters in the region. The bank said it would hire all 280 Chase employees who would be affected.
Chase, with $361 billion of assets, has been tweaking its branch operations outside its main New York and Texas markets. Last month Chase agreed to sell much of its upstate New York retail presence to M&T Bank Corp. of Buffalo. That deal, also for an undisclosed sum, included 29 branches, $600 million of deposits, $40 million in loans, and trust operations in five metropolitan areas in northern and central New York.
Chase is remaining in Syracuse and Rochester, and said it would devote more resources to those markets. Its middle-market commercial loan portfolio is not included in that deal.
There is also speculation the company will soon sell its operations in Panama. However, a Chase spokesman refused to comment about it.
Analysts said the ongoing review of Chase's branch operations is part of a bigger effort by the bank to scale back businesses that do not meet profitability targets. "It's all a part of their financial discipline," said Henry C. Dickson, an analyst at Salomon Smith Barney.
"They are looking at every operation to see where they can be more efficient," said Raphael Soifer, an analyst at Brown Brothers Harriman & Co.
The spokesman at Chase said proceeds of the branch sales would be invested in other retail operations that show strong growth prospects.
For Virgin Islands Community Bank, which has two branches on St. Croix in the U.S. Virgin Islands, the deal is a chance to bulk up substantially and add a corps of trained retail bankers. Executives said in a prepared statement that the Chase employee base in the region was a major reason for their interest in the deal.
The transaction is expected to close in the third quarter.
