FleetBoston Financial to Chop 4,000 Jobs
BOSTON - FleetBoston Financial Corp. said it will eliminate 6.7% of its work force, or 4,000 jobs, by the end of the year as it continues to restructure.Fleet Financial Corp. bought BankBoston Corp. last year and has been merging the operations.
About 2,800 of the jobs are in back-office areas, according to Fleet's annual filing with the Securities and Exchange Commission. The company will also cut 560 positions in global banking and financial services division, 600 in commercial and retail banking, and 40 in national consumer banking.
Fleet said it set aside $357 million to pay for severance and placement services. The cutback plan was announced late Thursday.
The company also disclosed a $150 million charge last year to set up a defined contribution plan for employees of its San Francisco-based investment bank, Robertson Stephens.
Royal Bank of Canada Bids for Ill. Lender
TORONTO - Royal Bank of Canada Friday made an offer to buy Prism Financial Corp., a Chicago mortgage company, for about $115 million.The transaction would punctuate a rocky 10 months for Prism, which went public just as rising rates clobbered the mortgage industry and lost its chief executive and founder, Bruce C. Abrams, to suicide in December.
Pending regulatory approval, the deal appears all but completed. Prism's three major shareholders - Mark Filler, president and CEO; Terry Markus, a co-founder; and the estate of Mr. Abrams - control more than 60% of the stock, and key members of management have agreed to tender their shares. Nonetheless, Royal Bank's offer of $7.50 per share falls well below the stock's opening price last May of about $20. It reached a high of nearly $29 in mid-July and then plummeted, trading below $4 in late February.
"This acquisition will give [Royal Bank of Canada] a distribution network in the U.S. and continue to strengthen our on-line presence," said John Cleghorn, chairman and CEO of Royal Bank.
Prism, which reported increases in originations and revenues in 1999 but also saw a 20% drop in net income, will operate as a stand-alone business unit under its existing management.
- Robert Julavits