Banc One Offers 8% CD in New England
Banc One Corp., which has indicated an interest in expanding into New England, is trying to woo the region's depositors with high interest rates.
In Connecticut newspapers, the Columbus, Ohio-based company is advertising a five-year certificate of deposit that has an 8% annual yield. The rate is one of the highest in the nation.
"We wanted to test in a market where we had some publicity," a bank spokesman said, referring to newspaper and television reports about Banc One before it dropped out of the bidding for the Bank of New England franchise. The bank had also reportedly been interested in acquiring two failed banks in Bridgeport, Conn., that Chase Manhattan Corp. bought last month.
Testing the Waters
Banc One's CD campaign, which started in late June and ends this week, is interpreted by some as an attempt by the bank to gauge its chances for a successful branch system in New England.
But a bank spokesman, John Russell, said: "We've been going into markets where we have card concentrations to build new business. That does not indicate an interest in having physical facilities. The economy in the Northeast is still way unsettled."
Banc One has about 100,000 credit card consumers in New England.
The advertising campaign will help the superregional company determine how well its name is known and how much appeal its products would have in the market. The ads highlight Banc One's financial health as well as the high interest rates.
While the yield being offered by Banc One appears to be the highest in the region, some bankers seemed unfazed.
"I don't see this as a big threat," said David Lentini, president of the Bank of South Windsor and president of the Connecticut Community Bankers Association. "That other banks are coming to Connecticut," he said, "is just a fact of life."
Consumers must deposit at least $1,000 with Banc One to qualify for the 8% yield. That rate is higher than offered by MBNA America for its five-year CD, which is yielding 7.95% and which Bank Rate Monitor identifies as the highest in the nation.
Though Banc One's CDs stack up favorably against the competition, Mr. Lentini said consumers have been reluctant to tie up their money for a long time because interest rates remain low.
Mr. Russell declined to say how many new accounts Banc One has snared in New England "We're quite pleased with the results, the numbers, and the amount of deposits we've been able to generate," he said. [Tabular Data Omitted]