Security Sells Chile Bank, a Step In Restructuring
LOS ANGELES -- With the sale of a majority interest in its bank in Chile, announced Thursday, Security Pacific is about 75% finished with dissolving its merchant bank.
The disbanding "probably will be completed by yearend," Robert H. Smith, chairman and chief executive officer, said in a telephone interview.
Security Pacific Corp. announced in December that it would disband the merchant bank, a chronic underperformer.
The unit originally represented a bold expansion into new areas such as investment banking, but the $83 billion-asset parent company decided instead to focus on retail and mid-size business customers in the West, on its finance company, and on the Pacific Rim region.
Other Units Previously Shut
Since December, Security Pacific has sold, restructured, or closed 19 merchant banking units, Mr. Smith said. Analysts estimate the merchant bank had about $25 billion in assets. Sell-offs accounted for part of the corporation's $6.5 billion asset shrinkage from yearend to the end of May.
Some parts of the merchant bank - such as its Asian Bank, Sequor group securities processing business, trust and investment business, and swaps and foreign exchange businesses - were deemed part of the core strategy and have been folded into other parts of the company.
Last month, the merchant bank disposed of three Australian companies. It is negotiating to sell its German consumer bank and private bank in Geneva, said Mr. Smith. An agreed sale of 51% of its London securities firm to employees is "well along," he added.
Mr. Smith said the corporation's total employment is down 2,400 since December.
In 1988 the merchant bank had 8,000 employees in the United States and 25 other countries.
Security Pacific did not disclose the terms of the sale of the 60% stake in Banco Security Pacific, Santiago, to an employee-led group. The bank had $350 million in assets, three offices, and 127 employees.