Mellon Bank said on Wednesday that it had formed an expanded private-banking division that will be headed by Lawrence S. Kash, who runs its private-client group.

The new unit will house the Pittsburgh bank's asset management, customized lending, trust, and estate planning units.

The consolidation fits with a banking industry trend in which businesses that serve wealthy individuals are brought together under one management. Lending to the affluent has customarily been segregated from trust activities.

Mr. Kash said the new alignment would help Mellon more easily investment management services to a client base that is accumulating assets as it ages.

Change in Functions

"Credit is no longer as important as it used to be," he added.

Mr. Kash 51, joined Mellon's trust and investment department in 1988 from PaineWebber Inc., where the consumer products group. He was raised inKentucky, and has a law degree from George Washington University.

Mr. Kash, whose personal-assets unit managed $ 25 billion for clients, reports to Robert Boyles, Mellon's executive vice president in charge of trust and investments.

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