BankAmerica Corp. has quietly completed a massive regrouping of its private banking and trust businesses.
The San Francisco banking powerhouse is consolidating three units -- international private banking, domestic private banking, and trust and investment management -- under the the banner of the Private Bank.
In doing so, BankAmerica hopes to regain its status as a major provider of financial services to affluent clients.
The overhaul is the latest in a series of steps to remedy the organizational woes that have dogged the private banking and trust units in recent years.
Took Reins in December
N. Richard Holmes, who had headed international private banking since February 1993, took the reins of the combined operation in December. He holds the post of executive vice president and reports to vice chairman Michael Rossi.
In a telephone interview, Mr. Holmes said he is determined to "let people know we're really in this business big time now."
Mr. Holmes said the integration of private banking and trust marks a shift from "a product-driven business to a broad-based, relationship-driven business."
"Pulling together these three businesses has created one large business with a critical mass," he said. The private bank, which has 22,000 clients, focuses on customers with $1 million in liquid net assets or $250,000 in annual income - a market segment that is expected to expand rapidly in the next few years.
A Total Approach
"It's tough to be a true private banking organization and not have trust and investment services," Mr. Holmes said. "To truly manage all aspects of an individual's balance sheet, we need to talk about credit, trust, liquidity, investments and deposits."
One industry expert said BankAmerica is wise to place renewed emphasis on wealth-management services.
"Private banking is growing like a weed around the world, and within BankAmerica's organization they have enormous untapped potential," said David Ross Palmer, president of a New York consulting firm that bears his name.
But, he added, "because of the enormous turnover and changes of last few years, they're playing catchup ball."
Woes Forced Sale to Wells
Mr. Holmes acknowledges that BankAmerica has had its setbacks. The 41-year-old Briton, who joined the bank seven years ago, said a gap was created six years ago, when capital woes forced the bank to sell its personal trust business to Wells Fargo & Co.
The 1992 merger with Security Pacific brought with it a trust and investment management business, but systems and management woes were uncovered, prompting the bank to set aside hefty reserves in April 1993. And in the past two years, executive turnover has run rampant in the private banking units.
In his new post, Mr. Holmes oversees a staff of 1,100. A key member of the executive team is Gary Matus, who ran the division briefly last year and now reports to Mr. Holmes. Mr. Matus is in charge of "the entire client-relationship side of the business," Mr. Holmes said.
Mr. Holmes said the private bank has the potential for considerable growth without staff additions. BankAmerica has 18 private banking outlets - nine in California, one each in New York and Miami, and seven offshore, in Asia, Europe, and the Caribbean.