Wells Unit Faces No Loss in Iowa Failure
WASHINGTON - Norwest Bank Iowa, the Wells Fargo & Co. subsidiary bank said to have faced up to $600,000 in losses on unsecured Fed funds bought by the failed Hartford-Carlisle Savings Bank, did not in fact have any such exposure, according to new Federal Deposit Insurance Corp. disclosures.An internal FDIC memo, cited in a Feb. 7 American Banker story on the Iowa bank's failure, had indicated that Norwest Bank Iowa was "unlikely" to receive repayment of the $600,000.
Wells refused to comment when that story was written, but complained to the FDIC. In a Feb. 9 letter to Wells executive vice president Tom Wiklund, FDIC Assistant Director Stan Ivie said Hartford-Carlisle "did not hold any unsecured Fed funds purchased from Norwest Bank Iowa at the time of its failure."
Revenues Rose 58% at Chase's Brokerage
NEW YORK - Brown & Co., the deep-discount brokerage of Chase Manhattan Corp., reported revenues for 1999 of $175 million, a 58% increase from 1998.The Boston-based on-line brokerage said revenues for the fourth quarter were $54 million, up 61% from the same period a year earlier. Daily average trades increased 130%, to 34,000, in 1999. For the fourth quarter trades increased 88%, to 41,900, the company said.
The company said the percentage of trades conducted through electronic channels rose 80% in 1999, from 60% a year earlier. Meanwhile, Chase plans to expand the operation by adding a service that would include brokerage to those interested in securing advice on-line.
- Karen Talley
Fiserv, Amex Kill Internet Banking Pact
BROOKFIELD, Wis. - American Express Co. and Fiserv Inc. have agreed to pull the plug on their outsourcing contract for Membership Banking, American Express' Internet-only bank.Membership Banking was launched in July 1999 to provide Amex customers with Internet-based banking services. Fiserv provides Amex with back-end data processing services. Six months into the contract, the deal apparently unraveled over philosophical differences.
Les Muma, vice chairman, president, and chief executive officer of Fiserv, said the contract would take up to nine months to unwind, and will be a non-event from a revenue standpoint.
The Amex contract was to have provided Fiserv about $10 million in yearly revenues. To date it was not profitable.
"It is an unwinding that in my opinion will benefit both companies," Mr. Muma said.
"Our Internet initiatives and Internet sales and Internet strategy remain alive and well," he added. "It had nothing to do with that. It had more to do with the business relationship between Fiserv and American Express."
"We hate to lose clients, but I think in this case we are better off and American Express is better off," he concluded.
Amex is rumored to be in discussions with Sanchez Computer Associates Inc., a Malvern, Pa.-based bank technology vendor. Market sources also say that Amex has a reputation for harsh treatment of its third-party vendors.
- Steven Marjanovic
MacDonald Named Citicorp Vice Chairman
NEW YORK - Citigroup Inc. named Alan S. MacDonald, head of customer management in its global corporate and investment bank, a vice chairman of two of its main operating units, Citibank and Citicorp.The appointment, announced Friday, made Mr. MacDonald one of four Citicorp vice chairmen. He will retain his role in the corporate bank, where he oversees teams of industry heads, market managers, and relationship bankers. He will continue to report to Victor Menezes, co-head of global corporate and investment banking and president of Citibank.
A 26-year veteran of Citi, Mr. MacDonald was previously head of corporate finance.
