BayBanks Inc., a major player in the Boston-area retail banking market, has always competed more with Fleet and Shawmut banks than with Bank of Boston, and the competition just got stiffer with the planned Fleet-Shawmut merger.

"BayBanks is known for having an ATM on every corner," said Gerard Cassidy, an analyst at Hancock Institutional Equity Services. "Now you'll have a Fleet ATM on every corner. I think the glow from BayBanks has dulled."

Providence, R.I.-based Fleet Financial Group's $3.7 billion acquisition of the Hartford, Conn., and Boston-based Shawmut National Corp. is expected to close in the fall, making Fleet the ninth-largest banking company in the country.

Bank of Boston Corp., with $45 billion of assets, will be dwarfed by the new Fleet's $81 billion asset base. And BayBanks is a $10.7 billion-asset company.

Fleet's deposit share in Massachusetts - which will be its home state after its planned headquarters move to Boston - will grow beyond that of BayBanks even after Fleet's anticipated divestiture of $3 billion of deposits.

Analysts pointed out, however, that BayBanks would remain dominant in affluent suburbs, particularly in Middlesex County. Its 20.5% deposit share there would be double that of Fleet plus Shawmut, according to Keefe, Bruyette & Woods Inc.

William Crozier, BayBanks' chairman, president, and chief executive, refused to comment on the Fleet-Shawmut merger's likely effects on his bank. He has said publicly that he does not wish to sell BayBanks.

The company's stock has traded recently at about $62.50 a share, after jumping nearly $3 on the day last week when the big merger was announced.

Analysts said there is little if any takeover premium left in the stock.

BayBanks has been known for its technology-centered strategy that includes aggressive deployment of automated teller machines and telephone service. But the bigger the competitor, the harder it is for Mr. Crozier to compete.

"The biggest problem would be keeping up technologically," said Don Kauth, an analyst at First Albany Corp. "There's no question over time that, to remain leading edge, BayBanks may need more size. That, maybe more than anything, could drive it to affiliate with somebody.

"They're probably looked at as a delectable morsel for a lot of people," he added.

But an acquirer might find the franchise expensive. "For a lot of banks, there would be dilution," said Fox-Pitt Kelton's Michael Granger. "Maybe the exception to that is Bank of Boston, but I get the feeling BayBanks doesn't want to have its company gutted by an in-market player."

More distant suitors could include Keycorp of Cleveland, Philadelphia- based CoreStates Financial Corp., First Fidelity Bancorp., Lawrenceville, N.J., or NationsBank Corp., Charlotte, N.C.

Fleet may be breathing down its neck, but BayBanks is by no means a has- been, Mr. Kauth said.

For one thing, banks in big mergers routinely suffer a runoff of customers, and BayBanks stands to pick up many of those who leave Fleet and Shawmut.

Analysts don't expect BayBanks to sell out soon, but "you never know about these things," Mr. Granger said. "I probably would have said the same thing about Shawmut a couple of weeks ago."

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