To further diversify profits, Old Kent Financial Corp. is seeking permission to underwrite corporate and municipal securities.

The Grand Rapids, Mich., banking company requested the powers this week from the Federal Reserve Board.

Old Kent said it hopes to get underwriting authority this year for its newly created Old Kent Capital Markets Corp.

The $16 billion-asset company also said it wants to offer investment advice to issuing companies, municipalities, and not-for-profit institutions.

Unlike most mid-cap banks, Old Kent has a broad source of revenue from its strong foothold in Michigan, Illinois, and Indiana. But in recent years, pressure to develop investment banking products has mounted for banks serving small to middle-market corporate customers.

In the first quarter Old Kent had a 4% decline in interest income, to $282.6 million, though net income rose 14%, to $58.6 million. The bank offset the drop in interest income by reducing its loan-loss provision.

"Old Kent versus other midsize banks is in a more strongly competitive position," said William R. Katz, an analyst at Merrill Lynch & Co. "But it's a company that's focused on improving its business."

Kenneth C. Krei, executive vice president of investment and insurance services, said that the new underwriting powers would further Old Kent's strategy of increasing earnings growth by expanding the services offered by its core businesses.

"This is really a natural extension of the investment advice and brokerage services we have provided our customers for years," Mr. Krei said. "It is that reputation that we believe positions us as a meaningful player in the capital markets activities of the communities we serve."

That Old Kent has chosen to build a corporate debt business internally suggests the company wants to keep its focus on the needs of its customers and avoid paying a premium for a purchase, Mr. Katz said.

"There's been a lot of mergers of commercial banks and investment houses and the question is always build versus buy," he said. "This is more of a build situation. It is relatively small and narrow in scope."

Including the new powers, Old Kent Securities Corp. would have three primary divisions: the Capital Markets group; Old Kent Financial Advisors, its retail brokerage unit; and Mutual Fund Services, which provides administrative, transfer agency, and shareholder support to mutual funds.

Investment advisory services will continue to be provided by its Lyon Street Asset Management Co. subsidiary.

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