Skeptical analysts are crawling all over the NationsBank-Barnett Banks merger, arguing that the staggering price forces NationsBank to hit unrealistic goals to make the math work.

But at least one potential problem may be minimized: The banks have similar branch and call center platforms. "The bigger issue isn't what software Barnett is using, but (whether NationsBank) used the same hardware infrastructure that Barnett has," says Robert Landry, a Tower Group analyst, who says that Barnett's hardware platform is compatible with NationsBank's Model Bank platform. "They're both OS/2, Argo-based," he says.

Dallas-based Argo Data Resource Corp. manufactures branch automation and call center systems. OS/2 is IBM Corp.'s PC operating system.

Which isn't to say all NationsBank has to do is change bank signs, says Landry. "There will be differences, no doubt about it," he says. "An ARGO system in one bank isn't an ARGO system in another bank; that's really an applications development system that a bank takes and then matches to the system they want."

Doubts among analysts center on whether NationsBank chairman Hugh McColl can achieve the 55 percent savings in overhead he projects. That means cutting Barnett's inefficiencies by more than 50 percent-a goal banks have been striving for through technology for years without much success.

And using technology to save overhead could hurt NationsBank's cost- cutting efforts, says Nancy Bush, an analyst with Brown Brothers Harriman, who lowered her rating on NationsBank to "underperform/hold." Barnett has many retiree-customers used to personal service-not NationsBank's heavily automated service.

Bush says that NationsBank priced this deal backwards. "The fifty- five percent number is what they need to make this deal work, not what they can achieve that gave them a price."

NationsBank and Barnett Bank declined comment. FB

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