Bank of Boston Corp. is selling off two of its five Puerto Rican retail branches and closing a third as part of an effort to refocus its business there on corporate banking.
The bank did not disclose the price for the branches and deposits. However, John Fraher, head of investor relations at Bank of Boston, said that the deals will "result in a small gain." The transactions are expected to close this quarter.
Bank of Boston is selling its Bayamon branch and certain deposits to Roig Commercial Bank. A second branch, in the city of Carolina, is being sold to Oriental Bank and Trust. One of the bank's three branches in San Juan is also being shut.
Mark MacLennan, group executive of multinational operations, said that although the branches were important to the bank, "at the present time they no longer fit with our current strategy."
"This is another example of a continued focus which calls on us to invest in businesses that are strategic for us and to exit those that are not," he added.
Bank of Boston began operating in Puerto Rico in 1983 and employs 55 people on the island. The bank had $218 million in deposits in its Puerto Rican branches as of last June, including $213 million in branches in San Juan, $1.9 million in Carolina, and $3.3 million in Bayamon.
The bank also has large retail operations in Latin America, which many have speculated would soon be spun off.
However, Mr. Fraher denied that such a sale was in the offing.
Henry Dickson, an analyst with Smith Barney, said the sale of the Puerto Rican branches was not necessarily indicative of a larger move by the bank.
"Puerto Rico is not a significant part of their international operation," he said.
Mr. Dickson noted that Bank of Boston has recently sold off several units where it felt returns were not adequate, including banking operations in Maine and Vermont, and a factoring business.
"They've consistently shown a willingness to sell off portions of the business that don't make sense to them. It's part of an exercise the whole industry is going through because banks have to allocate capital more efficiently," he said.
Bank of Boston is one of three mainland-based U.S. banks with branches in Puerto Rico. The other two are Citicorp, which has 17 branches, and Chase Manhattan Corp., with 11.