Bank of Montreal expects to save $6 million to $8 million over three years by consolidating its foreign exchange operations with those of its Harris Bankcorp subsidiary.
The move, announced this week, is part of a larger cost-cutting program aimed at saving a total of $175 million.
Both operations have been based at Harris' headquarters for three years but located on different floors.
"I looked at the two trading floors and decided . . . we could achieve better synergy by making it into one new state-of-the-art trading room," said Jamie Thorsen, managing director of the foreign exchange operation.
Ms. Thorsen said she plans to add five sales and trading specialists to the combined foreign exchange staff of 60.
The consolidation did not result in layoffs because Harris and Bank of Montreal focus on different markets, she said.
Harris has developed strengths in certain currencies and services corporate customers. Bank of Montreal serves institutional customers.
The Chicago bank's clients will benefit from the move because Bank of Montreal's trading floor is technologically more sophisticated than the one used by Harris, she said.
The consolidation makes Harris a more potent force against the four top players in the foreign exchange business: Citicorp, Chase Manhattan Corp., Chemical Banking Corp., and BankAmerica Corp.
"They're still the big boys," Ms. Thorsen noted, "but we've changed leagues."
She said the combined operations will serve about one-third of the nation's largest companies. It will be the fifth-largest foreign exchange business in the country and the largest in the Midwest.
The company must achieve cost savings because it made two large acquisitions this year, analysts said. Harris acquired Suburban Bancorp, a community bank in Chicago's suburbs, for $237 million in October. In November, Bank of Montreal agreed to acquire the Toronto-based investment banking firm of Burns Fry Ltd. for $403 million.
Bank of Montreal and Harris both want to reduce expenses. "This is just another step in that process," said Hugh Brown, an analyst with Nesbitt Burns.