Pressure on profit margins, due to increased competition and higher costs for both technology and experienced personnel, will force consolidation in the trust industry. This consolidation appears to be independent of the consolidation that will continue in the banking industry as a whole. The increasing costs of automation required to support the services demanded by the market will be a major factor in these consolidations. In the midst of this contraction, however, we see certain expansion trends being implemented by several bank trust departments. There will be two principal expansion strategies: international and national.

International expansion is already taking place, and has been for some time. This business is largely the domain of the money-center banks. Some of this activity may very well consolidate. In other words, one or two of the money-center banks may decide to exit the business.

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