Dean Witter Financial Services Group Inc. and NationsBank of North Carolina have signed a letter of intent to form a new brokerage firm, the companies announced yesterday.
The new firm, Nations Securities, will be jointly owned by a unit of Dean Witter, a subsidiary of Sears, Roebuck and Co., and a unit of NationsBank of North Carolina, a subsidiary NationsBank Corp.
The venture, subject to regulatory approval, is designed to offer investment banking products to bank customers through a traditional bank setting. The new venture, Nations Securities. will be an independent securities brokerage firm and is set to begin operations in the first quarter of 1993.
The firm will offer investment products such as mutual funds, fixed-income products, municipals, and equities to banking customers as alternatives to traditional bank investments such as certificates of deposit, said Philip J. Purcell, chairman and chief executive officer of Dean Witter, during a telephone conference call.
Through the new company, Dean Witter and NationsBank hope to tap into a trend by bank customers to purchase varying types of investment products. They also hope to benefit from the growth of bank sales of mutual funds.
Nations Securities professionals are expected to sell Dean Witter and NationsBank products as well as those of other firms, Purcell added.
The brokerage is expected to have 400 investment officers located at selected NationsBank banking centers throughout the country. Nations Securities will be staffed by professionals presently associated with Dean Witter and NationsBank. Nations Securities also will syndicate its business by offering similar products and services through other banks nationwide, Purcell said.
Apart from the new venture, both Dean Witter and NationsBank will continue to operate as independent companies, according to a press release.
Vincent P. Walls, senior vice President and branch manager of Dean Witter's Chicago office, will leave his position to become president and chief operating officer of Nations Securities. Charles R. King, currently president of NationsBanc Securities Inc.. will be named executive vice president of the new company.
Dean Witter ranked 11th among senior managers of municipal securities in the first nine months of 1992, with 97 issues totaling $2.78 billion, according to Securities Data Co. The securities firm has more than 350 branches and about 7,000 account executives providing service to more than two million customers.
NationsBank Corp. is the fourth largest bank holding company in the United States and has assets of $118 billion. The firm, formed in late 1991 from the merger of NCNB Corp. of Charlotte, N.C., and Atlanta's C&S/Sovran Corp., has full-service offices in nine states and the District of Columbia. This year, NationsBank reported third-quarter profits of $350 million. four times the level recorded in the year-ago period.