The planned merger of Keycorp and Society Corp. will bring together two of the most ambitious mutual fund programs in the banking industry.

What's more. the merger should bring significant economies of scale in the funds business, said James W. Wert, Society's chief financial officer.

In a news conference earlier this week, he said Keycorp's Victory Funds and Society's Society Funds would likely be melded into one family. The two families have combined assets of more than $3.2 billion in 21 funds.

Potential in Sales

The potential for the merged fund programs is perhaps most evident in the sales area.

The combined brokerage force would total about 215 representatives. But, if both banks complete their announced training and hiring regimens, they will shortly have about 230 brokers and by mid-1994 about 430 brokers.

That would roughly equal what is currently the largest brokerage force of a bank - the 440 representatives of NationsBank Corp.'s Nations Securities.

National Network

The brokers would serve a branch network that would extend from Maine to Washington across 18 states.

That is truly "a national network of investment sales specialists." said Edward Furash, president of Furash & Co., Washington.

Mary K. Stern. who heads up Society's funds program, said the megamerger will a "wonderful opportunity" for growth in the funds sector. Mutual funds, she added. "are a scale business."

Reached on vacation in Maine. she said it was too soon to say just how the two programs will be joined. But, she said, she plans to take advantage of her trip to the Northeast to meet with Keycorp officials to discuss the two programs.

While Society brings the bulk of assets - $2.6 billion - Keycorp has the lion's share of brokers, 170.

Combined Talents

And both bring considerable executive talent.

To aggressively grow the mutual fund programs, Keycorp hired W. Christopher Maxwell away from Chase Manhattan and Society signed up Ms. Stern, who had helped turn Norwest's proprietary fund business into a major force.

The possible combination of Ms. Maxwell and Ms. Stern's talents should give the new entity impressive intellectual capital, industry analysts said.

Just as the two bank's product lines should complement each other so should Ms. Stern and Mr. Maxwell, said Avi Nachmany, a senior partner in Strategic Insight, a New York-based mutual fund consulting firm.

He said both banks were good at meeting regional product needs and should find it easy to develop broader-based products to serve the new territory.

Under the overall terms, the new entity would be called Key-corp and would be based in Society's Cleveland headquarters. Combined assets would be $58 billion, creating the 10th-largest bank company in the country.

Several other mutual fund consolidations are on the horizon.

In August First Interstate Bancorp announced its plans to acquire San Diego Trust and Savings, which has more than $1 billion in its proprietary fund family.

Banc One has an option to purchase Premier Bancorp, which has a mutual fund program across Louisiana sells about $1 million a day across Louisiana.

Society itself has experience joining mutual fund programs having melded Ameritrust mutual funds into its own product-line after acquiring it several years ago.

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