SAN FRANCISCO - In what amounts to a declaration of victory on the credit quality front, BankAmerica Corp. has closed its special unit set up to sell problem real estate assets.
The San Francisco bank company last month folded the operations of its Real Estate Special Attention Assets Management group into its regular commercial property lending division.
A BankAmerica spokesman said the move reflected faster-than-expected progress in reducing problem real estate assets.
Holdovers from Security Pacific
BankAmerica organized the special assets unit in 1992 to dispose of distressed commercial realty following its acquisition of Security Pacific Corp.
Since then, the company has trimmed its assets held for sale, mainly problem real estate inherited from Security Pacific, from $3.4 billion to less than $700 million.
BankAmerica's efforts were boosted by a recovery in demand for California commercial property, which helped the company sell in bulk a total of $1.7 billion in realty assets earlier this year.
"Asset quality is no longer a problem for BankAmerica," commented Lawrence R. Vitale, an analyst with Bear, Stearns & Co.
BankAmerica's reorganized realty operation, renamed Commercial Real Estate Services Division, is headed by group executive vice president Kenneth G. Edwards, the BankAmerica veteran who had been chief of the special assets unit.
Group executive vice president Daniel B. Platt, head of commercial real estate lending until the reorganization, will leave the bank.
The executive was offered another job at BankAmerica, but declined to accept it, the bank spokesman said.
Mr. Platt, formerly commercial real estate chief at Security Pacific, was one of the most senior executives from the Los Angeles bank remaining at BankAmerica.
Then There Were Two
At the group executive vice president level, only two former Security Pacific officials will be left at BankAmerica: human resources head Kathleen J. Burke and California retail chief Liam E. McGee.
BankAmerica will eliminate an unspecified number of the 800 full-time jobs at the combined real estate units, requiring some layoffs.
The cuts will be counted as part of a company-wide reduction of up to 3,750 jobs announced last October.