1998, a handful of industry leaders stood their ground-on the sidelines. Chase Manhattan Corp., Fleet Financial Group, and Mellon Bank Corp. refrained from high-profile, geography-extending megadeals, yet could say they did just fine by their shareholders. "The industry is very much engaged in a debate over whether one needs to be gigantic," said Alden Toevs, executive vice president of First Manhattan Consulting Group. "Being skillful and having the appropriate product mix is critical. ... Being big isn't a silver bullet." To be sure, each of these companies had flirtations. Rumors persistently paired Chase with Merrill Lynch & Co. and Fleet with PNC Bank Corp. Bank of New York Co. very publicly pursued Mellon, to no avail, and Fleet satisfied itself with significant "segment" purchases-in credit cards, discount brokerage, and commercial finance. But for the most part, these organizations were happy to stay above the fray. For Fleet the attraction was fee-generating businesses like the Advanta Corp. credit card operations. Its selective dealings "continue to leverage the franchise that we've spent 10 years building," chairman Terrence Murray said in an interview last year. "There's a lot of juice still in that orange." Chase chairman Walter V. Shipley said early in 1998 that his company was under no pressure to find a partner. "Why would we feel under pressure?" he asked rhetorically at Chase's annual meeting. "The other (banks) were under pressure. We're not." Chase was pleased to tell Wall Street in December that it would exceed fourth-quarter earnings estimates. The New York company is now expected by analysts to post a 26% increase over the year-earlier quarter. Fleet and Mellon would improve fourth-quarter earnings per share by 19% and 11%, respectively, according to the consensus tracked by First Call Corp., Boston. Regional banks as a group are expected to increase earnings 16%, while money-center banks, among them Chase, would show an overall 7% decline, First Call said. "Our customers are very happy with us, we're getting a lot of new business, our cost structure is right," said Mellon's just-retired chairman and chief executive officer, Frank V. Cahouet. "Nobody is beating us on price, and we know we're investing in our products." Some observers say it is only a matter of time before the 1998 no-shows take places at the big-deal table. "It was more that the deal wasn't there, rather than the appetite's not being there," said Waino Pihl, a partner with Arthur Andersen in Chicago.
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