Highlighting its global ambitions, Bank of Boston Corp. has reached into its Brazilian operations for its next president and chief operating officer.
The surprise promotion of Henrique deCamp Meirelles, head of the Brazilian unit since 1984, comes as the company prepares to boost its overseas business, especially in Latin America.
"What this means is that the bank is going international," said Chad Gifford, the bank's current president and chief executive. He will remain CEO after Mr. Meirelles' appointment becomes effective Oct. 1.
The announcement, made Thursday, goes hand in hand with the planned closing on Monday of Bank of Boston's merger with BayBanks Inc. The deal creates a $63 billion-asset powerhouse, the nation's 15th-largest banking company.
Analysts said investors and regulators have long been worried about balancing the size of Bank of Boston's international business - which represented some 22% of total operating income last year - with that of its domestic operations.
The merger accomplishes that. With the addition of BayBanks' assets, concentrated in Massachusetts, international businesses will account for just 12% of total operating income.
"Bank of Boston has always had to restrict growth of Latin America because it made regulators and investors nervous," said Gerard S. Cassidy, an analyst with Hancock Institutional Equity Services. "With the BayBanks merger, they can take the chains off the racehorse and allow it to run the way it should. Putting Meirelles in as president allows the company to turn itself more into an international bank than it was before."
Indeed, Mr. Meirelles, who is credited with growing the Brazilian unit from a $70 million-asset bank to its current $4 billion, said in a news conference Thursday: "Now we have an opportunity to become even more of a global player."
In promoting the 50-year-old Mr. Meirelles to the presidency, the company passed over two vice chairmen: chief financial officer William Shea, 48, and Edward O'Neal, 51, who is overseeing the integration with BayBanks.
Some analysts speculated that Mr. Shea and Mr. O'Neal might choose to leave the bank. But Sally Pope Davis, with Goldman Sachs & Co., said she didn't think the move was intended to encourage either man to resign. "Chad has a very strong management team," she said. "I'd be surprised if he'd do something to upset that framework."
The promotion does make for a crowded office of the chairman. Along with Mr. Meirelles, Mr. Gifford and the two vice chairmen, BayBanks chief William Crozier, 67, will become chairman of the newly named BankBoston Corp. after the merger closes.
Henry "Chip" Dickson of Smith Barney said the bank's concentration of executives at the top is not a bad division of labor. "O'Neal and Shea have businesses to run. There's plenty for everybody to do," he said.
Bank of Boston's revenues from overseas operations climbed to $764 million, or 27% of total revenues, in 1995, from $621 million in 1994 and $492 million in 1993. Net profits have increased equally fast, rising to $128 million, from $112 million in 1994, and $59 million in 1993.
Some analysts said the appointment of Mr. Meirelles makes Bank of Boston look more like Citicorp, the other large American player in Latin America.
"Five to 10 years ago, if you would have asked any senior Bank of Boston executive or board of director what the chances were of making a foreign national president, they would have said nil. This shows a change in management style to adapt to a changing market. It's not the same old dumb Bank of Boston that people have criticized in the past," Mr. Cassidy said.