Fifth Third Bancorp of Cincinnati has appointed a new executive to head its electronic funds transfer unit, Midwest Payment Systems.

Henry W. Hobson 3d, a one-time Fifth Third employee who most recently worked at PNC Bank Corp., replaced Timothy Ballinger, who has moved to General Electric Co.'s credit union in Cincinnati.

Customers of Midwest Payment - including electronic banking networks, retailers, and other financial institutions - said the management change should have no noticeable effect on the service they receive.

Surprise Move

But they and others expressed surprise at the abruptness of Mr. Ballinger's departure and at the little publicity Midwest Payment Systems gave to the event.

Mr. Ballinger, who was widely recognized as a leader in the electronic banking community, had headed Midwest Payment's sales efforts for four years, and the General Electric position on the surface appeared to be a very different type of job.

"There are not many guys around with his talent and experience," said David O'Connor, president of Internet Inc., the Reston, Va. company that operates the regional automated teller machine network known as Most.

"Unless he's working on getting a network of some sort off the ground," the move to a credit union "is a very big surprise," Mr. O'Connor said.

Challenge of Growth

Mr. Ballinger understands that many consider it an odd career step. But he emphasized that the decision to take a less technology-oriented position - vice president of business development at a $250 million-asset credit union - was his own.

"I really like the challenge of trying to grow things, and this new job gives me that," Mr. Ballinger said from his new office. "George Schaefer [Fifth Third's president and chief executive officer] thinks I'm nuts, and quite frankly, my family thinks I'm nuts, but I'm ready for something new."

Observers noted that Mr. Ballinger's selling job must have become increasingly difficult as powerful competitors like Delaware-based Electronic Payment Services Inc., operator of the MAC network, moved into the Midwest.

But Mr. Ballinger said such competitive pressures played no part in his decision.

Second Time Around

While Mr. Ballinger is breaking his pattern, his replacement, Mr. Hobson, is on a return trip.

Mr. Hobson, 48, held a number of positions at Fifth Third during a nine-year tenure that ended in 1982.

More recently, he headed the PNC Bank unit that operated the Owl ATM network, also in Cincinnati, but that job all but disappeared when PNC joined with three other superregionals to form Electronic Payment Services in 1992.

"We welcome Mr. Hobson back," said Mr. Schaefer, CEO of the $12.5 billion-asset Fifth Third Bancorp. "His technical expertise, ingenuity, and familiarity with MPS made him a natural selection."

Higher Dividend, Too

Mr. Schaefer's statement, with the announcement of Mr. Hobson's appointment, was tacked onto a press release announcing a dividend increase.

A senior vice president, Mr. Hobson will oversee not only the national sales efforts previously managed by Mr. Ballinger, but also administrative functions that did not fall under Mr. Ballinger.

The businesses under Mr. Hobson, which have enhanced Fifth Third's reputation for innovation and efficiency, include a merchant processing business and the Jeanie automated teller network, which connects 1,100 ATMs for 200 member financial institutions.

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