When the time comes to choose this year's biggest banking success story, the hero is likely to be an executive who has pulled off a turnaround.

That is why all eyes will be on former Citigroup Inc. president James Dimon, who took over last March as chairman and chief executive officer of the struggling Bank One Corp.

Many are also watching Michael E. O'Neill, the CEO of Pacific Century Financial Corp., whose company is now under the close scrutiny of regulators.

And G. Kennedy Thompson, who has distinguished himself in his attempts to set Charlotte, N.C.'s First Union Corp. aright, is another promising contender.

"All three are in a position to make a tremendous difference in the future success of their respective companies," said Diane Glossman, a bank analyst with UBS Warburg.

Though other executives, like Todd Thomson of Citigroup and Heidi Miller, whom Mr. Thompson succeeded as Citi's chief financial officer last March, can be counted on to command attention this year, comeback stories may prove the most compelling.

Executives who face the challenge of turning their companies around are also facing an unpredictable economy. "A lot of their fate is out of their hands, particularly when you look at Jamie Dimon and Mike O'Neill, who are both at companies that will have credit problems," said Lawrence Cohn, a banking analyst with Ryan, Beck & Co. "If the economy doesn't tank, they can probably work their way through them. But if it does, it will be horrible for them - through no fault of their own."

The bankers themselves are more optimistic.

Mr. Dimon, 44, who recently oversaw a reorganization of Bank One's retail operations, said in an interview that he will focus this year on efficiency and profitability. Return on equity at the Chicago company is now in the 12% to 13% range, he said, but he would like to get it up near 20%.

"We want a battleship balance sheet," he said. "I'm hoping we can get there."

Although he expects further deterioration in the company's loan portfolio, Mr. Dimon said he hopes to attain earnings-per-share growth of 12% to 15% in 2001. "We'll be pruning businesses, getting our costs down, creating consistent financials quarter by quarter. The idea is to get our own health back," he said.

Though some have voiced doubts about the future of Bank One's online bank, Wingspan.com, and its First USA credit card operation, Mr. Dimon said he did not expect to make any dramatic announcements soon about either. This year, he said, the company will take a good hard look at the quality of its large lending customers in an attempt to stem further losses from big syndicated loans. And it will try to get some growth out of the credit card business now that it has stabilized.

In addition, Mr. Dimon said, Bank One is very close to hiring a new chief information officer.

But its main goal is to return to business as usual, with healthy double-digit returns and a higher stock price. "We have to perform here to earn the right to do interesting stuff," Mr. Dimon said. "Then we can think about what we want to be when we grow up."

Pacific Century's Mr. O'Neill faces his own Herculean task.

Since taking the helm of the Honolulu banking company in November, he has moved quickly to set up the kind of line-by-line business review he led as vice chairman of the old BankAmerica Corp. But, he told American Banker, the process will probably take until mid-March.

"At $14 billion of assets, Pacific Century is the world's smallest money-center bank," Mr. O'Neill said. "It has a far-flung network and is very complicated. I'm doing a full-blown assessment of all the pieces."

The 54-year-old executive said he will keep an open mind about which businesses to keep and which to jettison, but acknowledged that the company's core retail and commercial operation in Hawaii is likely to be its main source of growth. Hawaii's economy had an almost 3.5% growth rate in 2000; unemployment in the state is low, and tourism is strong.

All of Pacific Century's franchises will be reviewed, Mr. O'Neill said, including those in Asia, the western and southern Pacific, and California. "This is not just about sawing limbs off a tree," he said. "It's essentially a reallocation of capital to businesses where you have an advantage."

Mr. O'Neill said his biggest priority for 2001 is to get the company's return on equity, currently at about 8%, above its 13% cost of capital. He is considering layoffs, as well as selling businesses or branches, to achieve this. But, he said, "I can't make predictions about where the ax is going to fall."

Confining Pacific Century to a smaller swath of the Pacific may become part of his strategy. A company spread over as wide geographical area as his, he said, "absorbs a hell of a lot of management time."

Another of Mr. O'Neill's goals is to improve Pacific Century's credit rating, which is currently triple-B, according to Standard & Poor's. Mr. O'Neill wants to satisfy the concerns of regulators so that the memorandum of understanding now in place will disappear. "I certainly hope there won't be any more negative credit surprises," he said.

At First Union, the emphasis this year will be on execution. Mr. Thompson, the president and CEO, spent much of last year restructuring.

But for First Union, generating revenue will be no mean feat if the economy slows this year and capital markets become sluggish.

"There will be pressures on us and others in the industry from rising credit costs," Mr. Thompson said in a recent interview. "The market looks pretty stressed right now. That's one of the headwinds we'll have to sail through. The weakness in the equity and debt markets will challenge us going forward from a revenue generation standpoint."

Return on equity at First Union stands at a fairly respectable 16%, but Mr. Thompson would like to see it higher. His earnings-per-share goal is relatively modest: 10% growth, and he said he said he will give himself several years to achieve it. The company's efficiency ratio - the percentage of revenues spent on expenses - is at a flabby 64%, but Mr. Thompson said the company's brokerage unit is always going to push that ratio higher than he would like.

"We're not happy with our stock price," he said. "It's significantly lower than where we want to be. We think that our business is worth significantly more than our shares reflect."

Mr. Thompson said he knows that First Union cannot avoid an increase in nonperforming loans this year, but that the company is prepared for it. This year, he said, "you're going to see a company that is very focused on its businesses and its customers; a company that begins to meet its earnings projections and will be growing."

Though there have been reports in the business press that First Union may get swallowed up by a hardier rival - namely, FleetBoston Financial Corp. - Mr. Thompson said he is committed to keeping the company independent. "We absolutely think that the best way to ensure shareholder value is to execute our business plan," he said.

Another executive worth watching - though he is not saddled with the fate of fragile enterprise - is Citigroup chief financial officer Todd Thomson, in what promises to be an aggressive year for Citi.

The country's largest financial services company wants to build its emerging markets franchises this year and make its Salomon Smith Barney unit one of the top three investment banks in the world.

At the same time, Citigroup will be integrating its controversial acquisition of Associates First Capital Corp. and seeking to expand its wealth-management business, which Mr. Thomson describes as "fee-based, high growth, and relatively low risk."

Recruited in 1998 from GE Capital by Citigroup chairman and CEO Sanford Weill, the 39-year-old Mr. Thomson has leapfrogged up the ladder, from senior vice president in charge of strategic planning and mergers and acquisitions to CEO of the private bank, to his current role.

Often pegged as Mr. Weill's likely successor, Mr. Thomson said he has a lot to do right now as chief financial officer. He is, he said, "rethinking how we measure each one of our businesses," while "making sure we're using our capital well." He has also been laboring to improve the company's disclosures. This effort has already won plaudits from analysts.

"He has broken out the corporate bank by functional area and brought together information about the global card business," says UBS Warburg's Ms. Glossman. He has also increased the data available about consumer asset gathering.

Mr. Thomson said simply: "We're going to continue to make sure our story is understandable to the Street."

As for Ms. Miller, his predecessor at Citigroup, all she must do to get headlines this year is take a job in the industry.

Analysts say that though she has expressed dissatisfaction with the treatment of women in corporations, she is nonetheless unlikely to start her own business. And after her experience at Priceline.com, which she left in early November, an Internet venture will probably not be her next move.

"Heidi Miller can have any job in financial services she wants," said Mr. Cohn of Ryan Beck.

"Let's hope her next choice is a propitious one," said UBS Warburg's Ms. Glossman. "Perhaps the third time will be the charm."

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