Private Banking Giant Takes Shape
When BankAmerica Corp. merges with Security Pacific Corp. early next year, a double marriage ceremony will occur in the banks' private banking divisions.
Both banks segment their private banks into domestic and international private banking units. Under the post-merger structure, all the units will be merged into one global private banking business under the overall direction of Bank-America's Lewis W. Coleman.
The powerful Mr. Coleman, touted frequently as a successor to Bank America's chairman, Richard Rosenberg, is now vice chairman and head of the San Francisco company's world banking group.
Key Person Hired
Despite the integration, the bank recently hired Kent Price to run day-to-day operations of international private banking. Mr. Price is a refugee from Bank of New England, where he was chief financial officer in its final days.
Mr. Price was not available for comment. However, his hiring on the heels of the merger announcement makes it appear that he will have major responsibility when the merger closes.
Mr. Price reports to Richard Fulp, who runs all trust and financial management services at Bank of America. Mr. Fulp has been pinch-hitting since January for Thomas Quigg as day-to-day head of the international private bank. Mr. Quigg was transferred to run the bank's high-technology industry group.
No Word on Motivation
Stephen Spaulding runs the domestic side of BankAmerica's private banking group.
A spokeswoman for BankAmerica confirmed that the two banks' four private banking units would be combined into one. But she would not comment on the strategy behind the move nor on specific assignments. "We're in a hiatus in so many ways," she said, citing an across-the-board moratorium on post-merger remarks.
BankAmerica is not the first to consolidate its dual private banking operations. In December, Chase Manhattan Corp. reassigned the top managers of its private banking division while integrating its domestic and international operations.
James Zeigon, head of Chase's private banking activities, said the switch let the bank centralize investment management, take better advantage of global markets, and offer domestic products to international customers.
At BankAmerica and Security Pacific, meanwhile, private bankers are fretting about their future. The climate is made tougher by a gag order that sources at both banks said has been imposed by top executives. Few players know how they will be integrated into the final structure or whether they will survive.
Security Pacific's worldwide private banking business is much smaller than BankAmerica's according to industry observers.
"Their domestic private banking has been extremely disorganized and very unsophisticated in their ability to define niches," said Marily Magruder Barnewall, head of the Magruder Agency, a private bank consulting firm based in Cincinnati.
Strength Around the Globe
BankAmerica - the clear merger leader in most areas - is by far the strongest private banking partner. Internationally, it has 450 employees who focus on lending and portfolio management for wealthy individuals who are not citizens or residents of the United States. The division has 15 outposts around the globe, with a focus on Europe and the Pacific Rim.
BankAmerica does not break out the size of its private banking division's assets or profits. But bankers generally view it as a major force internationally in marketing to the wealthy, behind J.P. Morgan & Co., Citicorp, and Chase Manhattan Corp.
Security Pacific's most attractive private banking attribute for BankAmerica is a big and profitable domestic trust business. BankAmerica left the domestic trust area after selling its trust business more than four years ago to Wells Fargo & Co. and signing a noncompete agreement. That pact, however, is set to expire early next year.