In what is viewed as an interim step, loan syndication executives at BankAmerica Corp. and Continental Bank Corp. will jointly run the combined syndication operations of the merged banks.
The planned merger, expected to be completed by the end of the third quarter, was cleared by the Federal Reserve Board late Monday.
Keith Barnish and Walter Bloomenthal, who run loan syndications at BankAmerica and Continental, respectively, have been named co-heads of the post-merger syndication department.
Mr. Barnish will continue to be based in New York, and Mr. Bloomenthal will remain in Chicago.
In addition, BankAmerica will continue to maintain a loan syndication desk at its corporate headquarters in San Francisco.
Insiders acknowledge that the new setup could be somewhat unwieldy, and that it would probably make sense down the road to consolidate the operations under the leadership of one individual.
It's expected that other areas initially will be run jointly by executives from BofA and Continental.
Echoes of the Past
The situation is reminiscent of the so-called merger of equals of Chemical Banking Corp. and Manufacturers Hanover Corp. In a deal that depended on substantial cost-savings, analysts became concerned when it became apparent that the banks initially were unable or unwilling to choose between competing candidates to run various businesses.
In the BofA-Continental merger, though, cost-saving is "much less of an issue," said Raphael Soifer, banking analyst at Brown Brothers Harriman in New York.
"Here, it is quite clear that BofA is buying Continental," he noted.
Still, Mr. Soifer raised concerns about how effectively the businesses can be managed when they are run by co-heads.
"I would view any substantial number of co-heads as an interim measure which probably will be resolved 'eventually," the Brown Brothers analyst added.
Mr. Bloomenthal will be responsible mainly for loan sales and trading, while Mr. Barnish will be in charge of structuring and origination.
The division of labor reflects the complementary strengths of the two banks. Continental has a high level of expertise in sales and trading, while BofA has broad-based client relationships, and a big presence in the syndication market.
Both executives will report to Bob Griffin, a Continental executive who will oversee leveraged finance and syndications from Chicago.
As reported, Mr. Griffin was one of a number of senior executives named last month to fill key corporate banking posts. The combined corporate banking business will be run by Continental vice chairman Michael Murray.