Fleet Financial Group said Monday that it has hired retail banker A. William Schenck 3d to head its mortgage banking operation.

The move underscored a shift in strategy by Fleet and other banks in which mortgages are presented to consumers as one in an array of financial products.

Mr. Schenck, who had been vice chairman of retail consumer banking operations at Great Western Financial, said he would focus on persuading Fleet mortgage customers to use the bank for other financial needs.

"When you get a mortgage from an institution, shouldn't you also get their credit card or at least have a long discussion with the bank about it? Typically mortgage bankers haven't thought that way," Mr. Schenck said in an interview Monday.

Fleet Financial Group bolstered its product line in a deal last month to acquire Advanta Corp.'s credit card portfolio and in a September deal to buy Quick & Reilly Group, a discount brokerage.

Mr. Schenck will start on Dec. 1 as chairman and chief executive officer of Fleet Mortgage.

Some industry observers were surprised that Fleet tapped someone with relatively little mortgage banking experience. Before joining Great Western in 1995, Mr. Schenck spent 26 years with PNC Bank Corp. He was PNC's retail chief from 1991 until he left for Great Western, which was sold to Washington Mutual Inc. in July.

One executive recruiter said it is rare for nonmortgage bank executives to succeed in mortgages because of the complexities of the business.

But Fleet is not the only mortgage company to seek ways to broaden beyond its core business. As profit margins in the mortgage banking business continue to shrink, some mortgage lenders have been making a concerted effort to cross-sell products.

Countrywide Credit Industries, for example, bought a mutual fund company earlier this year. And the chairman of the nation's largest lender, Norwest Mortgage's Mark Oman, was put in charge of cross-selling other Norwest Corp. products to Norwest Mortgage customers in Iowa.

Mr. Schenck said he will work closely with Fleet's retail banking and investment product divisions to try and sell their products to Fleet Mortgage customers.

Fleet Mortgage Group has a customer base of almost 1.5 million people in its $122 billion servicing portfolio. Fleet originated $9.6 billion of mortgages during the first six months of 1996.

In addition to increasing cross-selling, a major task for Mr. Schenck will be improving Fleet Mortgage's bottom line.

"That division's profitability has to increase," said Katrina Blecher, an analyst with Gruntal & Co. Fleet Mortgage reported net income of $23 million in the first half of the year, a 26% decrease from the first six months of 1996.

Mr. Schenck said cutting expenses will be a major priority. "This is a real opportunity to look at every element of costs. We are going take the company apart," he said.

Fleet is updating the technology for its origination and servicing businesses. Fleet Mortgage has been viewed by many in the industry as a laggard in terms of implementing new technology.

The hiring of Mr. Schenck is also the latest step in building a new management team at the Columbia, S.C. lender. Fleet Mortgage Group had been without a chief executive officer since Richard A. Mirro left last December.

"If he can bring continuity and stability to Fleet Mortgage, that would be much very welcomed," said Thomas Theurkauf, an analyst with Keefe Bruyette & Woods.

In the last two months, Fleet Mortgage has hired two production executives and a loan servicing chief. Mr. Schenck said Fleet Mortgage is close to naming a chief financial officer as well.

Michael J. Torke, who had been running Fleet Mortgage since January, will remain with the company as president and chief operating officer. Mr. Schenck said he will continue to run the day-to-day operations.

Mr. Schenck will report to H. Jay Sarles, Fleet Financial's chief administrative officer. Mr. Sarles had been Fleet Mortgage's chairman.

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