Seeking to take advantage of turmoil at hometown rival Signet Banking Corp., Richmond, Va.-based Crestar Financial Corp. has launched an equipment leasing subsidiary.
Daniel E. McKew, former chief operating officer of Signet Leasing Co., is now president of Crestar Leasing Corp., which, like Signet Leasing, is based in Baltimore.
Mr. McKew said he left Signet in June after the company announced that it intended to scale back its equipment leasing efforts as part of a sweeping downsizing and reorganization.
Signet, which has a $1 billion-plus portfolio of equipment leases, now awaits shareholder and regulatory approval for a sale to First Union Corp., Charlotte, N.C.
Mr. McKew and Crestar said they can attract Signet executives and customers to Crestar with the new leasing operation.
"There is a big customer base" at Signet, said Mr. McKew, who spent six years with Signet Leasing. "And my clients will generally follow me. There are also a lot of people that won't be part of the First Union merger." He said he has already started recruiting executives to make the jump to Crestar.
A Signet official declined to comment, referring questions to First Union. An official there said that First Union and Signet are evaluating ways to streamline commercial leasing activities, but the companies said Signet's customers would be pleased with the array of products and services that result from the merger.
The $22.8 billion-asset Crestar has set a goal of building its leasing company, which opened its doors in September, to $700 million of outstandings by yearend 1999. It will focus on leasing equipment for a variety of industries, including communications, construction, office furniture, printing, manufacturing, transportation, medical, and technology, said Crestar officials.
Mr. McKew said he and an initial team of 22 loan officers would target companies within Crestar's Virginia, Maryland, and Washington market, where the banking company operates 481 offices. Crestar will also work with certain Fortune 500 companies across the country, he said.
"We're going to focus on controlling the Mid-Atlantic business. But we will be a nationwide company," he said.
The Crestar leasing company plans to make its first credit extension this week. A Baltimore customer is seeking $16 million to finance 150 rail cars needed to ship food across the country, said Mr. McKew.
Harold R. Schroeder, an analyst at Keefe, Bruyette & Woods Inc. in New York, said Crestar's move into equipment leasing should benefit the bottom line. Though the business carries more risk than traditional lending, if handled well it can strengthen customer relationships, draw new customers, and add to revenue.
"I think it is definitely a step in the right direction," said Mr. Schroeder. "It's a positive step from an earnings standpoint and from a customer-relations standpoint."