Winding down toward retirement at month's end, Mellon Bank Corp. chairman Frank V. Cahouet still has his eyes on the bottom line.

"The results are there," he said in a recent interview, looking back on 11 satisfying years in Pittsburgh. The turnaround he engineered, a "new Mellon," will be his legacy.

"We took it from a real tough situation," he recalled. "We brought it to here. We've had a great run."

Mr. Cahouet, 66, arrived in 1987, when the company was in deep trouble over emerging-market and real estate debt.

Brought in to succeed J. David Barnes as chief executive officer, Mr. Cahouet boldly moved Mellon's hemorrhaging assets into a shell organization, Grant Street National Bank.

He had gone that "good bank/bad bank" route in the mid-1980s when he was chairman, president, and chief executive officer of Crocker National Bank in San Francisco. The technique later became common in rescues of nearly insolvent institutions during the thrift crisis.

Mr. Cahouet also broke new ground with one of banking's earliest asset management acquisitions: Mellon's $1.8 billion purchase of Dreyfus Corp. in 1994.

The deal provoked criticism that the price was too high and that Mellon would not be able to operate in a very different business culture.

But now the Dreyfus deal is seen as having given Mellon a "business mix that is the envy of the industry," said Joseph Duwan, an analyst with Keefe, Bruyette & Woods Inc.

Consumer fee income, which includes income generated by Dreyfus, came to 14% of the $639 million in profits Mellon earned in the first nine months of this year. The holding company earned $559 million in the same period last year.

"I don't really take to heart the criticism," Mr. Cahouet said, adding that it was never "a popularity thing."

On Jan. 1, Mr. Cahouet is to hand over his current chairman and CEO titles to vice chairman Martin G. McGuinn, a 17-year Mellon veteran.

Mr. Cahouet is also president. After Jan. 1, vice chairman Christopher Condron will be president and chief operating officer.

The transition at the $48 billion-asset company is expected to be seamless. No major changes are in the offing-another source of satisfaction for Mr. Cahouet.

"The overall strategy, at least for the immediate future, has been pretty well defined," he said. It involves building Mellon's growth businesses: mutual funds, asset management, and corporate and institutional trust.

"Frank has always viewed part of the CEO's role as developing the senior management team, and he has spent a fair amount of time doing that," Mr. Duwan said. "The strategic foundation is in place. It's just a matter of executing it."

For all of its success, Mellon has failed to complete a large bank merger, and its stock price continues to languish.

Last year, CoreStates Financial Corp. of Philadelphia rebuffed a Mellon offer and accepted one from First Union Corp. of Charlotte, N.C.

Earlier this year, Bank of New York Co. waged a public campaign to woo Mellon, but Mr. Cahouet and company staved that off.

He said merging with Bank of New York did not make sense because of "a different concept of management style and a different concept of where we're going."

"Our customers are very happy with us and we're getting a lot of new business," Mr. Cahouet said. "Our cost structure is right. Nobody is beating us on price and we know we're investing in our products, our people, and our channels of distribution."

Bank analysts agreed that Mellon can go it alone.

"Without question, that's a franchise that can go forward on its own," said James Schutz of ABN Amro Inc., Chicago.

Would Mellon be more receptive to a Bank of New York offer post-Cahouet?

"We don't make those decisions in a vacuum," Mr. Cahouet said. "Those decisions were collective decisions."

As for CoreStates, Mr. Cahouet said, "We saw a lot of pluses, but we saw them at a price. You better not go out and do a deal and not put some guidelines down as to what you're willing or not willing to pay. We had no problem walking away from that transaction."

But Mellon's stock dropped when news of the CoreStates bid leaked. Some investors were shocked that Mellon, which had committed itself to doing nonbank deals, would even look at a major bank acquisition.

"It surprised some people," Mr. Cahouet said, but "there were a lot of opportunities as we saw it, both in terms of the overlap advantages and to expand the fee end of the business."

With CoreStates taken out of the game, investors began to push for a succession plan at Mellon.

Announced last January, it, too, was controversial. Some observers said the top job should have gone to Mr. Condron, who presides over the mutual fund business.

Mr. Cahouet defends the choice of Mr. McGuinn, whom he calls "a very, very talented guy."

He did "phenomenal" work in his most recent job, building Mellon's retail operation, Mr. Cahouet said. "He has been absolutely essential to developing our strategy."

Mr. Cahouet has long been known for working around the clock, but said he is not a workaholic.

"That is a person who doesn't have any balance," Mr. Cahouet said. Hard work "comes with the territory-if you can't handle it, you really shouldn't have the job."

Asked about his immediate plans, Mr. Cahouet said he has no definite ones except to relax-though his wife is talking about going on a safari. He will remain on the Mellon board.

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