John Bahnken Senior vice president Fleet/Norstar, Providence, R.I.

John Bahnken, 37, knows a lot about merging banks, and that should stand him in good stead as the industry consolidates.

Mr. Bahnken is chief financial officer of Fleet/Norstar Financial Group's three New York banks, which have $13 billion in assets. But he sees his role as much larger than coordinating the group's financial reporting to the folks at the parent company up in Providence, R.I.

Besides playing a key role in melding Fleet's three New York banks into one, Mr. Bahnken and his staff of 100 plan to revamp strategic planning at the franchise. And that may prove to be his most important contribution, he says.

Whatever strategy he suggests, it is certain to take into account the Northeast's economy, currently quite sluggish.

"Banks in New York will have to operate in a flat cost environment in the next few years," he says. "Consumer and business loan demand hasn't been that terrific, so most of the incremental gains going forward will have to come from being the low-cost producer."

Unlike many finance executives, Mr. Bahnken is no stranger to mainstream banking. At Marine Midland Bank, where he spent the first 10 years of his career, he worked in capital markets, lending, and product development. Says the 1979 Hofstra University grad, "I spent a lot of time in operations when it wasn't in vogue."

Before taking his assignment at Fleet in November, Mr. Bahnken had spent about three years as a senior financial officer at Prudential Securities. "The thing that's really helped me is my breadth of experience," he says.

In Mr. Bahnken's eyes, the secret of successful banking is allocating capital properly. His reasoning: If banks make each business line operate with the appropriate capital level - based on the types of risks they take - the businesses can be better controlled and the risks minimized.

"Historically, banks haven't focused on capital," he says, adding, "It's really at the base of everything we do in the financial services industry." Good point.

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