Harold W. Pote, a once-familiar face in banking circles, has reemerged as the second-in-command of Chase Manhattan Corp.s consumer bank group.
Mr. Pote, 54, who goes by Hal, was named regional banking group executive at Chase this month. He is working closely with his former Beacon Group colleague David A. Coulter, a vice chairman and head of the companys consumer operations.
Mr. Pote is responsible for developing strategies for Chases distribution networks, including branches, automated teller machines, call centers, and the Internet.
Chase is getting set to close its deal for J.P. Morgan & Co., which would tilt the balance of the companys business even more toward investment and corporate banking activities. Executives have been mum about exactly what may become of the consumer businesses, but what is certain, analysts say, is that Mr. Coulter is there to make changes.
One of the cornerstones of our new strategy will be to create broader and deeper relationships with customers, and deposit and investment products will be used as the starting point, Mr. Coulter said in a Dec. 6 memorandum to employees. We will then build on the core relationship with other products.
Speculation over whether Chase would sell part or all of its consumer operations has swirled since July, when Mr. Coulter, a former chief executive of BankAmerica Corp., succeeded Donald L. Boudreau as head of retail. During a recent conference call, executives from Chase said Mr. Coulter and his team of executives were looking closely at the consumer businesses and may have some progress to report by mid-January.
In an interview, Mr. Pote said two initiatives are underway: improving sales of investment products through Chases multiple channels, and upgrading new distribution capabilities, including Web banking. After that we will have a six-sigma effort to improve the quality of services we offer, he said.
While the exact direction of Chases consumer businesses has yet to be decided, analysts said it appears as though the company is developing a strategy around branches and the Internet.
There is a general recognition that bricks-and-clicks are the way to go, said Diane Glossman, an analyst at UBS Warburg. He looks like he is there to coordinate that effort.
Meanwhile, management for the group is shaping up. Reporting to Mr. Pote are Shelaghmichael Brown, head of financial services distribution; Harry DiSimone, head of marketing and consumer markets; and Joe Scharfenberger, head of small business banking.
Mr. Pote was a 1980s banking wunderkind. In 1984, at age 37, he became chairman and chief executive officer of a $3 billion-asset Philadelphia company called Fidelcor Inc.
A graduate of Princeton and Harvard, he was viewed as a strategic thinker. He took an unconventional path to the top that included a detour from the credit department for positions in investor relations, development, and corporate planning.
He was enormously popular with Wall Street. Robert Albertson, a fund manager and Harvard Business School classmate, describes Mr. Pote as a good people person.
Mr. Pote built Fidelcor through a series of acquisitions that increased the companys size 10-fold in four years, to $30 billion of assets. The companys stock and his reputation were soaring.
Then trouble set in. Fidelcors last big deal was its February 1988 merger with First Fidelity. By December of that year, mounting loan losses had hit the company, which warned it would have a fourth-quarter loss of between $145 million and $190 million. A chunk of the losses would come from a Fidelcor loan to a Philadelphia area housing developer, and the rest from loans underwritten by Fidelcors London office.
Mr. Pote was forced to assume the blame, and he resigned as chief executive, along with other senior managers. The episode, analysts say, was an inkling of what was to become a dark era for regional banking companies. Several others reported steadily rising nonperforming loans that year, including Bank of Boston Corp., Shawmut National Corp., and Bank of New England.
It was the first bank blowup of that era, said Nancy Bush, an analyst Prudential Securities. It started the trend.
Mr. Pote said that since then Ive learned a bunch of things about the business world and about myself.
After First Fidelity, Mr. Pote said he started a real estate company in Philadelphia. In 1993 he and six others founded Beacon Group, where he had been focusing on private equity investments. Chase acquired Beacon in July.
Neither Mr. Coulter nor Mr. Pote has any direct experience running a consumer banking operation, but they worked together for two years at Beacon and share similar analytical styles. They would strike me as two guys who would get along, said Thomas Brown, president of Second Curve Capital in New York.
Mr. Pote said his new job reminds him of his days at Fidelcor. Ninety percent of what we did was regional banking, with a strong presence in retail and small businesses, he said. Im kind of going back to what I did before.