NEW YORK -- Bank of New York Co. does not need mergers to propel growth, because the majority of its businesses are growing at a healthy clip and the rest will get a lift as the economy gathers steam, chief executive J. Carter Bacot told Reuters.
"We want to be able to grow internally regardless of the economic times. We are able to do this. Most banks, I submit, can't, since they don't have the right product mix," he said.
He is optimistic for profit growth, be it in credit cards, securities processing, retail banking or commercial banking.
Mergers Not Ruled Out
Despite his outlook for strong internal growth, Mr. Bacot is not ruling out mergers.
He said that he has talked to other banks about merging over the years and that he will keep doing this, buying only when his strict acquisition standards are met.
He will look at any acquisition in the United States that adds to earnings within 12 months and in which there are cost savings.
And Mr. Bacot said Bank of New York does not need a merger to find his successor. He reaches retirement age in four years.
"We have a good group here, which has worked together a long time. We are not worried about [succession]," Mr. Bacot said. But he also said that he has not designated a successor.
Mr. Bacot declined comment on reports of recent merger talks between Bank of New York and Fleet Financial Group.
Analysts said reports were overblown, as banks often hold talks about possible mergers.
Fleet's chairman, Terrence Murray, recently said that considering a merger would be "more opportune" after Fleet's current cost-cutting plan takes hold.
Asked if he would consider a merger of equals, Mr. Bacot said only, "Is there any such thing as a merger of equals?"
He sees interstate banking laws passing soon, spurring bank mergers, and said the bank is limited in what it can buy as its stock price is below that of most regional banks.
Mr. Bacot will look at buying assets from the Federal Deposit Insurance Corp., including pieces of Carteret Savings Bank, chief financial officer Deno Papageorge said, especially if the Carteret assets fill in gaps in New Jersey, where Bank of New York wants to expand.
But mainly the bank's acquisitions will be of nonbanking companies, where Bacot sees "more oppurtunities."
Topping his list are securities processors.
Mr. Bacot is not interested in buying credit-card or mortgage companies but will not sell its own small mortgage company.
He likes factoring companies but said not many are left to buy.
Card Growth Strong
Mr. Bacot said cards and securities processing are "close to half of our earnings and are growing very strongly," with card growth at over 20% a year and securities processing at a double-digit rate.
But growth rates should last into 1995.
Trust, investments, and factoring account for another 12% to 14% of profits and are growing at double-digit rates.
He sees these high growth rates also lasting into 1995.
"Close to 60% of our earnings have been growing very well in whas has been a slow period. If the economy improves, we are going to get better loan growth" in both corporate and consumer loans, he said.