Chase Manhattan Corp. has shifted the top executive of its giant credit card unit, which has posted big profits but lost market share amid fierce competition.
Thomas Lynch, who had led Chase's card division for 13 years, was put in charge of retail marketing, a position created last year to coordinate business strategies.
Reports to President
In his new post, Mr. Lynch, an executive vice president, will not have any business units reporting to him but will continue to report to Chase's president, Arthur F. Ryan.
Succeeding Mr. Lynch is John A. Ward 3d, a senior vice president who was in charge of marketing jumbo mortgages.
Chase is one of the largest bankcard issuers in the nation, but in the past few years fell from second to third place. It had $10 billion in outstanding loans at the end of last year, roughly flat from a year earlier. Its 9.6 million card accounts were down 4%.
In a telephone interview Thursday, Mr. Lynch acknowledged Chase had lost market share, but said it resulted from increased competition and a deliberate slowdown in marketing. He defended his caution as a way to keep delinquencies low in a weak economy.
"The business had been successful, and we're moving forward," he said, noting that the card unit earned record profits of $300 million last year.
Mr. Lynch conceded that he did not ask for a job change, but said he is "ecstatic" about his new post.
But some observers said the change signifies a desire by Chase to pump new energy into the card unit.
"They have not been as aggressive as they should be," said Robert B. McKinley, president of RAM Research Corp., a credit card research firm in Frederick, Md. "They've been very measured in the their strategy, a quiet player, which is not good enough in an industry that's been turned upside down."
He said that intense competition from nonbank competitors such as American Telephone and Telegraph Co. and Sears, Roebuck and Co. - and interest-rate wars that have been pursued aggressively by other competitors - have nibbled away at Chase's market share.
Chase was the last major issuer to drop interest rates on its credit cards, Mr. McKinley said. And it lagged behind Citibank and other big issuers in targeting card solicitations to specific groups of consumers, he said.
As retail marketing executive, a post created for William Balderston, the chief executive of Chase Lincoln First who is retiring this year, Mr. Lynch is in a liaison role between the bank's consumer product sector -- headed by Robert Hunter -- and its regional branch network, which is run by Donald Boudreau.
"This plays back to my roots in marketing at General Foods," Mr. Lynch said. "Bob, Don, and I are running the retail business as a triumvirate."
Mr. Hunter's kingdom, meanwhile, has expanded to include all nationally marketed consumer products. Under the new lineup, Mr. Ward will report to him as head of credit cards. In addition, Mr. Hunter will continue to oversee areas such as investment products, Chase's newly consolidated mortgage businesses, and its auto finance unit.
Mr. Ward has no direct experience with credit cards, although he worked with Mr. Lynch in a previous position as chief credit officer for Chase's branch network.
In another shift, Fred Koons, who had been president of Chase Home Mortgage Corp., has been given day-to-day responsibility for all mortgage products. Mr. Koons continues to report to Mr. Hunter.