With Chase Manhattan Corp. and Chemical Banking Corp. poised to merge, some observers say that Chase's approach to retail investments will come out on top.

Details are scarce, but the combined company that would be operated under the Chase moniker is expected to consolidate much of its investment management and sales operations to boost profits and cut costs.

"The two have a lot of areas of strength, said Joy P. Montgomery, president of Money Market Initiatives, Morristown, N.J. The merged company, she said, is "going to be a giant player in the area of investment products. But it will take a while before they sort it all out."

The merger, which would create the largest banking company in U.S. history, would make only the fourth-largest bank-run mutual fund complex, with $14 billion of long-term and short-term fund assets under management.

The new Chase, however, would have more than $101.4 billion of managed trust assets, making it the country's seventh-largest manager of trusts and estates.

Chase and Chemical representatives said it was too soon in the merger process to comment on specific lines of business. But already there are plans to shuffle responsibilities at the new Chase.

In a joint statement, the companies said that Michael Hegarty, currently vice chairman in charge of consumer banking at Chemical, will oversee deposit and investment products for the new company. Donald L. Boudreau, vice chairman of Chase's consumer banking division and its retail investment sales, will be in charge of retail credit products.

Executives at the two companies did not make themselves available for interviews. Some industry analysts, however, tried to shed some light on what kind of retail investment effort is likely to emerge.

Geoff Bobroff, president of the E. Greenwich, R.I., consulting firm that bears his name, said that Chemical will probably merge its less well known Hanover Funds with Chase's own Vista Funds. Chase's top-rated mutual fund family is sold through the bank, and by brokers nationwide.

Though Chemical is "coming out ahead everywhere else, its mutual fund operation is clearly less developed than Chase's," Mr. Bobroff said. He added, however, that the Hanover brand name will probably be dropped.

"Chase not only brings a broader product line," Mr. Bobroff said, "but they are products that have been in the market for five or more years, and that's important for any company to market its funds."

The Vista Funds would also gain exposure to the broad middle market that Chemical services, said Avi Nachmany, a partner at Strategic Insight, a New York firm that advises mutual fund companies and banks.

"Chemical's client base is much more middle ground," Mr. Nachmany said, while Chase is seen as servicing a much more upscale customer. "To the extent that there is some difference between the two banks' clienteles, you might get a new outlet of mutual fund distribution that crosses company lines."

Chase's brokers may also take the lead in the new company's retail investment sales, some observers say. Sources familiar with Chase and Chemical said both companies have done a poor job of luring customers to investment services.

Even so, Chase's investment sales division has gone the furthest in mining its own customer base, sources said. And indeed, the company is consolidating some of its disparate investment sales programs into one unit, in an effort to boost its business to bank customers.

Plans called for Chase to merge its branch-based brokerage program with a smaller one that had focused on investment sales outside bank branches. The combined sales force will sell a broader variety of investment products, and focus on building financial relationships with bank customers, said J. Peter Benzie Jr., president of Chase Manhattan Investment Services.

"Clearly we'll get the benefit of having a unified sales force, and the economies of scale that come with that," Mr. Benzie said prior to the merger announcement. "Hopefully we can blend the different approaches of both groups and get the best of both worlds."

Mr. Benzie did not return phone calls and a spokeswoman for the bank would not comment on whether the brokerage consolidation would go ahead as planned.

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