BankBoston Corp. will close its branches in Paris and Frankfurt this year and centralize its management in London.
The $68.2 billion-asset bank said the consolidation would require a $13 million restructuring charge in the first quarter. The shutterings should free up about $25 million in capital, the bank said.
The decision closely follows a move by BankAmerica Corp., which recently scaled back its lower-margin businesses in Western Europe. Over the last decade, U.S. banks, including BankBoston, have been steadily closing marginal offices in Europe. The offices were mainly set up in the 1970s to serve U.S. corporate customers and multinationals.
BankBoston has one of the largest international networks among U.S. banks, with more than 100 offices in 23 countries.
Paul Hogan, vice chairman and head of corporate banking, added that the bank plans to continue expanding in Eastern Europe as well as Latin America and Asia. BankBoston will retain its subsidiary in Portugal, a branch in the Madeira Islands, and a private banking unit on the island of Guernsey.
The closures would not have an impact on BankBoston's participation in the Connector banking partnership, which provides local and pan-European cash management services.
The bank has $100 million in loans on the books of its Paris office and $150 million in Frankfurt. The Paris branch, opened in 1972, employs 14. The Frankfurt branch, opened in 1974, employs 30.
A spokeswoman for the bank said outstanding loans will be allowed to run out.
"These offices are left over from the old days when Bank of Boston aspired to be a multinational bank," said Lawrence Cohn, a banking analyst with Ryan, Beck & Co.
"The levels of revenue they generate are quite modest, so they're pulling back to London, where they have a reasonable business base."
