Chemical Banking Corp. on Wednesday announced a reorganization of several core business areas and transferred its chief merger coordinator to a new administrative post.
The nation's third-largest bank, as expected, united its consumer business lines into a group headed by Michael Hegarty, a former Manufactuers Hanover executive who was running Chemical's branch network.
His empire has been expanded to include the bank's nationwide mortgage banking, consumer finance, and credit card businesses.
Bad Loans, Restructurings
Chemical also created a "specialized finance group" that puts most of its problem loan and restructuring areas under a single managerial eye. The unit will be headed by William C. Pierce, who is now the bank's risk policy officer.
In addition, Chemical transferred Darla D. Moore, who helped create its highly lucrative debtor-in-possession finance business, to run a new corporate banking group aimed at the retail industry. Her former business will become part of a restructuring and refinance area headed by William C. Repko, who will report to Mr. Pierce.
Commercial real estate finance, which had been Mr. Hegarty's responsibility, will become part of Mr. Pierce's specialized finance group.
Merger at |More Mature Stage'
Though a critical segment of the merger is still to come - the closing of 80 branches - Chemical's moves indicates that "the merger is reaching a more mature stage," said Raphael Soifer, an analyst at Brown Brothers Harriman & Co.
The bank also announced that Joseph G. Sponholz, merger implementation manager, was named executive vice president in charge of administration and financial management. He reports to vice chairman Edward D. Miller and will remain a member of Chemical management committee.
Mr. Sponholz had been Chemical's chief financial officer before the merger, and some observers viewed the move as conspicuous loss of power.
In forming the specialized finance group, the bank not only brings management focus to its credit problems and the profitable business of lending to troubled companies, but also solves another merger-related issue.
Mr. Pierce, a Chemical veteran and its former chief credit officer, had lost much of his power after the merger. The top credit position was given to William C. Langley, Hanover's chief credit officer. Chemical officials said Mr. Pierce was being tapped for the specialized finance unit because of his credit management expertise.
The group will have responsibility for most of Chemical's real estate loan portfolio, which totaled $8.7 billion at Sept. 30. Of that, $1.34 billion was nonperforming.
"It' indicates that the political nature of implementing a merger of equals continues," commented Mr. Soifer. "It's still a mixed bag of managers from both sides."
The exception appears to be in the retail area, where Hanover management clearly dominates.
"Hanover management has protected its interests to make sure that the merger does not end up being run by Chemical," said Judah Kraashar, an analyst at Merrill Lynch & Co.