When NationsBank and Barnett Banks Inc. decided to merge last week, the fate of their nonbank consumer finance units may not have been a top concern.

In fact, synergies between NationsCredit Consumer Corp., Irving, Tex., and Barnett's Equicredit Corp., Jacksonville, Fla., are few and far between, analysts say.

Both units make loans to customers that their parents turn down-but that's where the affinity ends.

Equicredit makes subprime mortgage and home improvement loans to customers who don't qualify for traditional loans but aren't at the bottom of the credit scale. The company originated over $2 billion of such loans in 1996, through over 150 branches in 44 states.

The unit, purchased by Barnett two years ago, has been growing significantly-despite the abrupt departure this year of its chief executive. The majority of the loans Equicredit originates are securitized and sold on the secondary market, with servicing conducted from a central location.

NationsCredit, on the other hand, conducts itself more like an old- school finance company, said Darrell Hendrix, analyst with Friedman, Billings, Ramsey.

The unit, which was formed when Chrysler First merged with US West Financial four years ago, now has $1.8 billion in net outstandings. NationsCredit caters to customers "deeper in the credit spectrum" than Equicredit, Mr. Hendrix said.

About 70% of NationsCredit's consumer loans are real estate secured, a company spokeswoman said. The finance unit also makes manufactured housing loans, unsecured personal loans, and subprime auto loans through SunStar Acceptance Corp., Atlanta.

NationsCredit's servicing is very decentralized, Mr. Hendrix said, and the division is funded by NationsBank rather than by securitizing loans on the open market.

Ultimately, the two finance units are "not a perfect fit, but they are complementary," Mr. Hendrix said. Some cross-selling opportunities may exist, he said.

Combined, the two units have about 420 branches, which puts them far behind top finance company Associates First Capital Corp., Dallas. Associates originated over $45 billion in home equity, unsecured personal, and credit card loans last year through 1,500 branches.

Spinning off one unit to generate funds for the growth of the other is one strategy a company might pursue after a merger, but few analysts say they think NationsBank will take that approach.

Leaving the two finance units separate may be the best strategy, said Garreth Plank, analyst with UBS, San Francisco. "If they are good stand- alone units, there is no reason you can't let them be," he said. Both NationsBank and Barnett have been dedicated to nonbank consumer lending in the past, he said. "I don't think they'll get rid of either one." u

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