Citigroup could face an uphill climb in persuading consumers that one- stop-shopping is the way to go.

While the chieftains of Citicorp and the Travelers Group promote their merger as an ideal way to bring consumers an array of financial services, interviews Tuesday with customers outside Citi branches revealed that many would feel more comfortable spreading their business around.

"I believe in diversifying," said David Levinson, an insurance professional from Commack, N.Y. "The biggest question is whether people will buy everything in one place. I don't know if I'd be willing to do that."

Mr. Levinson's views were echoed by others, who said convenience is not as important as cost. "It depends on the products and services offered by Travelers," said Nicholas R. Peluse, an institutional salesman from Glen Rock, N.J., who has been a Citibank customer for 17 years. Nonbank services would have to be both price competitive and easy to access electronically, he added.

The views expressed by Citicorp customers, who were interviewed at random, echoed research that found skepticism among customers in New York and Chicago about banks' claims of service and convenience, according to Leslie Martin, research director at PSI Global, Tampa.

Participants in recent focus groups questioned whether banks "can give you the best deal and even give you the product that you need," Ms. Martin said.

What's more, "People didn't feel the need to have a 'relationship' with their bank. When you tried to ask them what a relationship meant, they would say 'I don't want a relationship with my bank.'"

Certainly, for Hatsue Braatz, a 28-year-old risk manager for The Tokai Bank in New York, news of the $70 billion megamerger was unsettling. "I have negative feelings about it," she said. "As a customer, you want to diversify too."

"I don't know what the effect will be," admitted Linda Turner, a General Electric employee. But "I wouldn't put all my money in one bank, just in case something happens."

In general, customers were reluctant to give over their decision-making power to a financial services behemoth, even if it meant less hassle. "If you have a problem with your heart, you go to a cardiologist, not a general practitioner," said a 45-year-old systems analyst from Manhattan, who was leaving the bank branch in Citicorp's headquarters at 53d and Lexington Avenue. "I try to find the best out there."

News of the deal raised other concerns as well. Consumers who have become experienced-and even somewhat sophisticated-when it comes to big mergers involving their banks, said they felt uncomfortable with the size of the proposed company, which would notch nearly $700 billion in combined assets.

"In terms of the individual, it will have a bad impact. It's a monolith and bureaucratic," said Mike Arnold of Manalapan, N.J.

David Barnes, of Sag Harbor, N.Y., agreed. "Efficiencies never get passed down to the average consumer," he said. "When markets contract, it favors the bigger guys."

Those interviewed also cited fears about the possibility of declining service once the deal went through, particularly when it came to the integration of the two companies' computer systems.

"There's too much market consolidation, less alternatives and less service," said John Lamberti of Lynbrook, N.Y. "The small guy is getting pushed out. It's going to squeeze me out."

And, inevitably, the question of rising fees came up again and again, although the conventional wisdom and certainly the merger partners claim that bigness will bring economies of scale and lower costs.

Stephen Brobeck, executive director, Consumer Federation of America in Washington, said that Citicorp already charges relatively high fees. "I think they may raise the price for their products," he said.

Customers will be making a trade-off, he continued. Greater convenience will mean higher prices. And customers will be paying for that convenience.

Certainly, many of those interviewed were unfazed by the news that their bank would soon be part of the country's largest financial conglomerate. And some thought it was a good idea.

"For me, it's interesting when you can have everything you want with one company," said Claude Raphael, a parking attendent who opened a savings account at Citibank two years ago. "You don't waste time. It's just 1-2-3, instead of going here and there."

Mr. Raphael, who lives in the Flatbush section of Brooklyn, was not concerned about leaving all his money with one institution. While he doesn't have many accounts with Citibank at this time, he one day would like to buy insurance and mutual funds through his bank.

"Sometimes bigger is better," said Edriane Exanot, a 28-year-old dietician who has had a Citibank account since she was 12. Ms. Exanot, who has checking and savings accounts as well as bonds and certificates of deposits with Citibank, said she liked the convenience of dealing with only one institution.

Patsy Alexander said Citibank is the best financial institution she has ever banked with. She said she enjoys the personal service, and was confident it would continue with Citigroup. And if she had the option, she said, she would extend her financial relationship with the bank.

"It'll make it easier for me to save for college," said the homemaker as she left the branch with 1-year-old Rashida sleeping in a baby carriage.

Besides its effect on individual consumers, the merger of Citicorp and Travelers could have a profound impact on entire neighborhoods, especially in New York City, where Citi is the No. 2 retail bank behind Chase Manhattan Corp.

Matthew Lee, the executive director of Inner City Press/Community on the Move, a Bronx-based community organization, said that his group was preparing to register dissatisfaction with the deal with the Federal Reserve Board. The Fed is expected to rule on the proposed merger sometime before the deal is slated to close in the third quarter.

Citicorp denies mortgages to African-Americans as compared to whites at a much higher rate than the industry average, Mr. Lee said, citing 1996 data filed by the company to comply with the Home Mortgage Disclosure Act.

The "denial rate disparity" for Citicorp is 2.6 to 1 for all types of home loans while the industry as a whole has a rate of 1.9 to 1.

Meanwhile, he maintained, Travelers' Primerica Financial Services unit recruits low-income people to go door-to-door in their neighborhoods, selling overpriced insurance products, debt consolidation loans and home equity loans with exceedingly high interest rates.

"We're opposed to this deal," said Mr. Lee. "It will not create a financial supermarket but a mega store with four separate ways in: a rundown entrance with overpriced, low-quality products for the poor and on the other side, a Saks Fifth Avenue, with clean entrances and a full choice of products at competitive and fully disclosed prices."

Reporting by Charles Keenan, Tami Luhby, and Liz Moyer.

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