KeyCorp is consolidating its retail banking operating and specialty consumer businesses segments into a single unit to boost efficiency and strengthen its ties to customers.

Jack J. Kopnisky, the senior executive for the retail bank, was promoted to head the new organization. He will combine retail banking with home equity finance and other consumer finance units, including Champion Mortgage, auto financing, marine and recreational vehicle lending, and education lending. The consumer bank group makes up 40% of KeyCorp’s total revenues.

Meanwhile, James E. Bennett, a senior executive vice president, said that he would leave the $85 billion-asset Cleveland banking company on Jan. 1 to become chief executive of a local e-commerce business.

Robert W. Gillespie, chairman and chief executive officer, said the moves would make it easier to service KeyCorp’s nationwide customer base. “For the first time, we will have within a single organization virtually all of the products and services that can be sold nationally to our retail customers,” he said. “That will substantially improve our abilities to meet these individuals’ needs, and retain and deepen relationships with them.”

Like several other banking companies, KeyCorp is searching throughout its organization for ways to cut costs and maximize sales opportunities. Some competitors, such as National City Corp., have decided to exit certain consumer businesses, like automobile leasing, because they are no longer profitable. KeyCorp recently agreed to sell its credit card operations to Associates First Capital Corp.

The restructuring is part of a plan KeyCorp announced in September that called for 2,300 job cuts, nearly 10% of its work force, within the next 15 months. The company recorded $198 million of charges in the third quarter. The bank projects total savings of $360 million by the end of 2002, when the plan is fully implemented.

The company will halve the number of its business lines, from 22 units to 11, folding them into more centralized divisions. That will lead to several changes in senior management, the company said.

It is KeyCorp’s largest reorganization plan to date. The 2,300 job cuts are in addition to the 1,975 jobs that Key has slashed through attrition since last year.

“We need to simplify our organization so we can operate more efficiently,” Key spokesman John Fuller said. “We are building relationships with clients.”

Analysts have been reluctant about the company’s past restructuring plans. KeyCorp announced plans in 1995 and 1996, but neither yielded positive earnings growth. Analysts have said investors will take a “wait-and-see” attitude until they feel that this latest plan is working.

Mr. Kopnisky is to begin his task by studying each line of business to find ways to maximize revenue, the company said. It is unclear what cost savings will result.

The consolidation makes strategic sense for KeyCorp, said Katrina Blecher, an analyst with Sandler O’Neill. “More banks should be engaging in this strategy,” she said. “When you develop operations where you have less silos, you have motivation from everyone in the group pulling for the same.”

By placing the retail banking and specialty consumer sections in the same unit, KeyCorp will learn more about what products its customers want, Ms. Blecher said. The reorganization will also make it easier for KeyCorp to sell consumer products, she said.

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