In a reaction to last summer's market tumble, Republic New York Corp. said Monday that it would take a $97 million pretax charge in the current quarter and eliminate 10% of its work force.

The bank said it would realize $42 million of cost savings this year and $67 million annually beginning in 2000.

"We will focus the corporation's resources on growing its core business, private banking," said Dov C. Schlein, vice chairman of the holding company and president of its lead bank.

The restructuring charge and an additional $7 million of expenses for the phaseout of some employee benefits programs could wipe out Republic's first-quarter earnings, analysts said.

Republic posted a $92.7 million loss in the third quarter last year because of trading losses in Russian government securities. Profits rebounded in the fourth quarter, but the damage was already done. Net income for all of 1998 was off 45%, to $248 million.

Analysts said confidence in Republic had been shaken by the losses and by a management shuffle in January, when Robert Cohen, the vice chairman of global private banking, suddenly resigned to pursue other interests.

"The company has been in a state of turmoil," said Marni Pont O'Doherty, an analyst at Keefe, Bruyette & Woods Inc. "They are trying to find a place for all the pieces."

Analysts said this latest retrenchment, which was widely expected, marks an important milestone for the $50.4 billion-asset Republic. It had built a reputation for conservative management, only to stumble in recent months from trading activities.

"Private banking has always been at the center of their strategy, but now it is even more important," said Gerard Cassidy, an analyst with Tucker Anthony Inc.

The bank said it would also focus on consumer financial services and niche lending, foreign exchange, and precious metals businesses. Capital markets activities are being scaled back and streamlined.

In addition, Republic said it would consolidate its 90-branch retail network in New York and southern Florida, though it did not provide more details.

About 560 employees will be displaced, 384 of them through layoffs. Another 127 employees will be hired by Computer Sciences Corp. of El Segundo, Calif., which has an agreement to run some of the bank's back- office functions.

The computer services deal and its terms will not be completed until April, the companies said. Given its 10-year length, the outsourcing pact is likely to be one of the biggest in banking.

The remaining 49 positions would be cut through attrition, the bank said.

Management of the private bank is to be streamlined globally. A spokesman for the bank said Mr. Cohen's departure was unrelated.

Private banking made up 45.7% of the bank's net income for 1998, consumer banking 38%.

Republic said it wants to boost cross-sales of private banking products through its retail network and hire 45 people for the effort. Republic also indicated it would consider acquisitions to round out its private banking product set.

The bank said it plans to stimulate sales of mortgages and investment products through its branches and a new Internet site.

Capital market activities will be scaled bank, the bank said. It has already dismantled some derivatives functions and is streamlining support functions in its global markets and global treasury units.

Still, many analysts questioned whether the restructuring program goes far enough. The announcement made no mention of anticipated revenue gains as a result of the cross-selling efforts.

"They've identified the easier targets," said Stephen Biggar, an analyst at S&P Equity Research. "But it seems that these are only the initial steps."

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