When Fleet Financial Corp. announced its intention last December to buy National Westminster Bancorp, some analysts questioned how the company could absorb Natwest so soon after assimilating Shawmut National Corp.

Fleet said that consolidating the two companies would not be a problem, because it will not begin the Natwest conversion until after Shawmut has been digested.

But now, with Fleet midway through the conversion of Shawmut's systems, observers still have questions.

"Doing a large-bank acquisition is an extremely delicate balancing act," said William F. Spinard, managing director of Furash & Co. "You've got many balls in the air: the systems aspect, the branch network, the two very distinct cultures."

Several observers said that Fleet may be able to handle the technical demands of the conversions. It has much experience in acquisitions.

However, other issues, such as the formation of an effective management team and Fleet's entry into new markets, still could pose problems.

After a two-and-a-half month evaluation of some 35 major systems involved in the Shawmut merger, the banks' management team decided that half the winning systems would come from Fleet and 15% from Shawmut. The rest - including consumer and commercial loan systems - already were common to both banks.

The bank converted general ledger systems a few months ago and recently finished consolidating treasury portfolios.

In February it expects to begin converting the branch systems to Fleet's branch automation system. The task should be completed in June.

"We know how to do technically accurate consolidations," said David M. Sheppard, chief executive officer of Fleet Services Corp., the data processing arm of Fleet Financial Corp.

The Shawmut merger is expected to generate cost savings of $400 million per year, or 14% of combined noninterest expenses, through the consolidation of work forces, facilities, and operations areas.

The banking company plans to lay off 10% of the work force, or 3,000 employees - many in operations and back-office areas.

"Fleet takes a direct approach: 'You will use my systems,' and there's not much discussion about it," said Robert Landry, a consultant at Tower Group, in Wellesley, Mass. "They're very cost-conscious and they don't fool around."

"The big acquirers have pretty much gotten the technology conversion down," said William F. Spinard, managing director of Furash & Co.

"The good banks have already laid the groundwork for the conversion while the government and the shareholders are still deciding on the merger."

Fleet will actually go through 457 individual conversions, Mr. Sheppard said. That's because the bank takes the interdependencies among systems and breaks them apart, doing each conversion in isolation from the others.

When it converted general ledger, it kept the old system running to accept feeds from the deposit system, and set up a mirror system that was fully tested before the bank cut over to the new system.

During the next few months, the company will convert Shawmut's branches to Fleet's branch automation system, deploying about 1,200 workstations running the DOS operating system, in 200 branches.

Mr. Sheppard, who is heading the Shawmut consolidation, also is in charge of the Natwest conversion.

"We've done due diligence on the Natwest consolidation, but don't want to let that consolidation distract us from the successful completion of Shawmut," Mr. Sheppard said.

In the second quarter, Fleet staff will be sent to Natwest to complete the studies, he said.

Despite the complications, some pointed out there may be an advantage to doing two mergers in quick succession. "You've got an experienced team that understands the process and understands the issues," Mr. Landry said.

But some observers say they have deeper concerns, asking whether Fleet has taken on too much.

The proposed acquisition of Natwest indicates that Fleet "continues to focus on events, like acquisitions, instead of on execution," said Thomas K. Brown, a securities analyst at Donaldson, Lufkin & Jenrette.

He added that it is not clear how well the new management team, composed of Fleet and Shawmut executives, would work together.

"The one thing you can't predict (in any merger) is how compatible the cultures are going to be, what members of the management team will stay," said Mr. Spinard. "It's the one problem you can't solve before the merger."

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