Relying less on investing in international markets and more on serving corporate customers, First Chicago NBD Corp. is restructuring its foreign operations to cut costs.
The $122 billion-asset company announced Monday that it is merging the former First Chicago and NBD London offices. The merged office will serve customers in Europe, Africa, and the Middle East. Company officials said a small number of employees would be laid off from the total of 500 that work in the two London offices.
Company officials declined to say how much money would be saved in the consolidation but called it part of a larger plan to cut $45 million from corporate banking expenses by 1997. In total, the company expects to trim $200 million in costs through the merger of its Chicago-based and Detroit- based constituent companies.
In 1994, foreign operations brought in $650 million, or 13% of First Chicago's total revenue. But net income from these operations only accounted for 2% of total profits due to provisions for credit losses.
Analysts said clear evidence exists that First Chicago is moving toward becoming a regional Midwest banking company and away from the old First Chicago's reputation as a money-center bank. "They're not trying to be all things to all people anymore," said Michael Moran, an analyst at Roney & Co.
First Chicago was much more involved in international markets than NBD. Both banking companies began establishing foreign offices in the early 1960s, primarily to serve their large corporate customers.
The company plans to merge offices in Sydney, Australia, and Tokyo by March 31.