Chase Manhattan Corp. plans to become a major equity underwriter over the next 10 years-without buying an investment bank - said William B. Harrison Jr., Chase's vice chairman in charge of wholesale banking.

The nation's largest bank is currently searching for a head of equity underwriting, Mr. Harrison said, and will look to that person to build a high-powered equity team.

"This is a very important building process for us in terms of getting the right people-people who are compatible with our culture and vision," he said in an interview Monday.

The decision to build a stock operation, rather than to buy one, comes as other commercial banks are reportedly looking to acquire securities firms to take advantage of relaxed regulations.

But with Wall Street and other brokerage firms commanding high prices and investment bankers often fleeing at the first sight of commercial banking's bureaucracy, Mr. Harrison prefers to build his own operation. After all, Chase has created a credible high-yield bond shop and has laid the groundwork for a mergers-and-acquisition advisory effort.

Still, Mr. Harrison, a veteran of Chemical Banking Corp., did not rule out buying a securities firm if one of his competitors made such a move.

"It really depends on who buys and how much that changes the overall competitive vision," said Mr. Harrison, in a wide-ranging interview in his office Monday.

Regardless of how the banking behemoth develops an equity operation, Chase clearly sees the business as a vital component of its effort to emerge as a universal bank. It has already spent heavily to develop other investment banking product capabilities and fears they will suffer without equities.

"If we're not a major equity player, it will limit the upside in mergers and acquisitions and securities businesses," said the 54-year-old Rocky Mount, N.C.-born banker. He added that it would take 10 years for the bank to build a meaningful presence, but in the interim Chase would be "good, but not a leader."

"We don't have to be a leader," he said. "We are profitable already."

Mr. Harrison's stance leaves the bank with the flexibility to respond to market conditions, analysts said.

"They've been going through the make-or-buy decision forever,' said Joel Silverstein, a bank analyst at Deutsche Morgan Grenfell. If the market collapses, Chase can come in and grab an investment bank at a discount rate, he said. If it doesn't, the bank can pick up talent and build the group internally.

"Chase has been out there checking it out and they've been watching the foreign banks," said Mr. Silverstein.

According to Mr. Harrison, the bank is looking for a head of equity who can blend into a culture that stresses teamwork, flexibility, and an integrated approach to corporate finance.

"The culture issue is soft but it's very important," he said.

Once it has found that leader, Chase plans to focus on serving five or six industry segments, hiring researchers and traders to support them.

Even without buying a firm, Chase is likely to shell out big money for an equity expert. The bank's chief financial officer, Peter J. Tobin, has told analysts that Chase's expenses have marginally increased because of the Wall Street-type salaries it now doles out.

But Emanuel N. Monogenis, a managing partner at the search firm Heidrick & Struggles, said Chase is not paying above market to attract and retain key employees.

"They're not buying people," said Mr. Monogenis, who recently placed Salomon Brothers' John Lipsky as Chase's chief economist. "Investment bankers sense that the Chase one day could be an owner of their own firm, so candidates are making strategic decisions on their own behalf," said Mr. Monogenis.

From where Mr. Harrison sees it, Chase has more to offer than big paydays. Because of its huge capital base and its dominance of several product areas, Chase is one of only a handful of firms positioned to become a truly integrated commercial and investment bank, he said.

"We've combined three banks over five years," Mr. Harrison said. "By definition, we've upgraded our talent substantially, then added talent from the Street."

Now, the challenge is to keep that talent, analysts said.

Henry C. "Chip" Dickson, a bank analyst at Smith Barney & Co., said that the need to retain people is both good news and bad news for Chase.

"The bad news is that it costs money to protect people," he said. "The good news is that their people are highly regarded enough that other firms are pursuing them."

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