NationsBank Corp. is on target to cut its annual operating costs by $400 million and to boost its fee income by $50 million in the wake of its merger, a senior executive said.

Sam Bass,a NationsBank executive vice president, also detailed for the first time how the company expects to earn the added fees.

70% Planned for 1992

Mr. Bass,who is responsible for merging the operations of NCNB Corp. and C&S/Sovran Corp., said in an interview that the company is well on its way to meeting its goal for closing branches, consolidating systems, and eliminating jobs.

"We planned to complete around 7% of the effort in 1992," Mr. Bass said. "We're on track to complete that percentage or even better."

Analysts applauded NationsBank's progress and said they would not be surprised if NationsBank exceeds its target. "If anything, they're being conservative," said Brent Erensel, senior banking analyst at UBS Securities Inc., New York. "I always thought they would have pretax savings of $500 million."

NationsBank is the country's fourth-largest banking company, with $11 billion in assets. For the six months ended June 30, the company reported noninterest expenses of $1.9 billion, up 2.6% from the same period last year. Its noninterest income - including fees - was up 9.1%, to $938 million, for the period. Net income rose 54%, to $561 million.

Comparisons to the year-earlier periods have been adjusted pro forma to reflect completion of the merger.

Service Charges Tightened

Mr. Bass said most of the $50 million increase in fee income would come from stricter enforcement of service charges. He said the bank is scaling back its policy of waiving overdraft and other checking and savings account fees for preferred customers.

In the first six months of 1992, NationsBank collected $290 million of service charges on deposit accounts, up 7.8%, or $21 million, from a year ago.

NationsBank also expects to change its late-payment charge for holders of credit cards issued by C&S/Sovran. Previously, those cardholders paid penalties of 5% of the minimum monthly payment, said Gary Baskin, a NationsBank vice president in the Norfolk, Va., charge card unit.

Mr. Baskin said NationsBank will set its late-payment fee at a flat $15, which will be an increase for most customers. In the first six months of this year, NationsBank collected $78 million in bank card fees, up 30% from the same period a year earlier.

Analysts said it was unusual for a company to provide a breakdown on how it expects to achieve increases in fee income.

"There's been a general emphasis in the banking industry on increasing fees," said Diane B. Glossman, vice president at Salomon Brothers Inc., New York. "But it's something we don't see because banks don't quantify it."

4,000 Jobs Already Cut

NationsBank expects three-quarters of its cost savings to come from cutting 9,000 jobs, Mr. Bass said. About 4,000 have already been cut, he added.

The company reported personnel costs of $918 million in the first six months of 1992, up from $907 million last year.

Mr. Bass said most of the staff cuts would be achieved through attrition; a hiring freeze remains in effect. However, thousands of employees will be asked to move or to take new jobs.

Uniform Software on Hold

About 10% of the cuts - 700 to 800 jobs - will be made by closing more than 110 retail branches, Mr. Bass said. The company has closed more than 40 branches in South Carolina and expects to shut down another 60 in Florida this fall.

Mr. Bass added that NationsBank has not yet decided when to convert its retail branches to corporatewide software for checking and savings accounts. In the interim, checking and savings account software will be standardized state-by-state.

NationsBank has branches in nine states and the District of Columbia, and it runs 11 checking and savings account software systems, Mr. Bass said.

NationsBank has nearly finished combining the credit card operations of NCNB and C&S/ Sovran into a single unit, Mr. Bass said, with employees in Dover, Del., and Norfolk. The bank has also consolidated its automobile lending operations from more than 60 sites nationwide to a single site in Greensboro, N.C.

Consolidation Timetable

Other operational changes on tap include:

* Fourth quarter, 1992, consolidation of 15 wholesale lock-box operating centers into six sites.

* First quarter, 1993, deployment of corporatewide trading systems for government bonds.

* Mid-1993, consolidation of electronic funds transfer operations from nine to two sites and of four data centers into two.

* Fourth quarter, 1993, conversion to corporatewide trust systems.

The remaining anticipated cost savings stem primarily from leveraging volume discounts with vendors.

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