Banc One Corp.'s retail investments chief has abruptly resigned, the latest in a series of high-level defections in the company's investment products area.

The departure of Paul F. Walsh suggests that Banc One is rethinking its approach to the booming field of investment sales and management. Observers say the company wants to tie that business more closely to its basic banking operations, partly to boost cross-selling opportunities.

Mr. Walsh, a four-year veteran of Banc One, said he gave up his post because of differences of opinion with the company's chairman, John B. McCoy.

"We agreed to disagree on issues of philosophy and strategy," Mr. Walsh said in a telephone interview.

Mr. Walsh had been chairman of Banc One Investor Services Group, which encompassed insurance, investment advisory, brokerage, and trust. But the company recently shifted responsibility for those units to Donald McWhorter, Banc One's president and chief operating officer.

The shift puts one person in charge of both the banking units and the investment affiliates - a move aimed at helping the company "leverage its distribution channels," according to a consultant familiar with the situation.

Banc One has been one of the most ambitious banking companies in investment products. It has already opened more than 600 personal investment centers in its branches and plans to add 400 more by the end of next year.

The bank's proprietary mutual funds, meanwhile, have mushroomed to $8.2 billion in assets from $4.9 billion a year ago.

Other Departures

But the management team for investment products is clearly undergoing change.

Robert Flowers, president and chief executive of Banc One Securities Corp., the retail brokerage unit, resigned last month.

And Michelle Lenzmeier, senior managing director of Bane One Investment Advisors, plans to leave her job overseeing the bank's proprietary funds by December.

Two key regional managers, Rick S. Glawe and Richard Seidel, recently defected from the Banc One ranks. And David Toth, a key executive in the trust marketing division, is planning to jump to St. Louis-based Boatmen's Trust.

'Hasn't Panned Out'

Some observers say all this suggests that Banc One is scaling back its ambitions in investment products.

"They started out with great hoopla and it just hasn't panned out," said Nancy Bush, a bank analyst with Brown Brothers Harriman & Co.

"The business is just not going to be big enough to contain both the egos and salaries that are in it," she said.

Banc One executives, however, insist that the company is proceeding with its growth goals, including boosting the properietary funds to $10 billion by yearend.

The bank is "well on the road to achieving our targets," said David Kundert, head of the bank's mutual fund division.

"There have been no changes in strategy, and we anticipate none," he added.

On the Payroll

Mr. Walsh, for his part, will remain on Banc One's payroll while he looks for another job. "I'm serving whatever role John [McCoy] wants mc to serve," he said.

He said there was no connection between his decision to leave and other defections, adding that "the program is not in jeopardy."

Before assuming the helm of the investor services group, Mr. Walsh for a year and a half was chairman of Banc One Diversified Services Corp., the affiliate that covers credit card, mortgage, leasing, and financial services. Jeffrey P. Neubert now holds that post.

Mr. Walsh joined the bank in 1990, as head of nonbanking affiliates, from Norwest Corp., where he was in charge of capital management and trust for the Minneapolis-based banking company.

From 1974 to 1987 he was with Citicorp, serving as chairman of Diners Club of Germany in his last post there.

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