Sullivan Ready To Step Down At First Chicago
In a surprise move, Barry F. Sullivan announced Wednesday that he plans to retire as chairman and chief executive of First Chicago Corp. within six months.
Mr. Sullivan, who turns 61 in December, said he would surrender the reins of the nation's 12th-largest banking company no later than next April, when the company holds its annual meeting.
"I recommended to the board earlier this month that it was time to get on with succession." Mr. Sullivan said in a prepared statement issued late Wednesday afternoon.
Mr. Sullivan has run the bank for nearly a dozen years and has had no clear successor.
In the statement, First Chicago said its board would consider candidates both inside and outside the bank to replace Mr. Sullivan.
Speculation on Johnson
No specific mention was made of Richard Thomas, 59, First Chicago's president.
There was speculation recently that Thomas Johnson, formerly president of Manufacturers Hanover Corp., was considering a move to First Chicago as Mr. Sullivan's heir apparent.
The two were seen dining together in New York, prompting the speculation.
Mr. Johnson was squeezed out of Hanover when the bank agreed to merge with Chemical Banking Corp.
Mr. Sullivan has waged a lengthy struggle to turn the $49.2 billion-asset company into a consistent performer.
The departure comes at time when First Chicago is limping and considering whether it should seek a merger partner.
On Wednesday, the American Banker reported that Mr. Sullivan held preliminary merger talks recently with Thomas C. Theobald, his counterpart at Continental Bank Corp., but that the talks had broken off.
First Chicago's $131.4 million of net income through nine months this year represents a paltry 0.33% annualized return on assets and a 5.7% return on equity.
"People have been wondering how Mr. Sullivan lasted as long as he did," said Richard Mueller, a banking analyst with Duff & Phelps Inc., Chicago.
The executive has presided over a number of unpleasant surprises at First Chicago's global corporate bank, including heavy provisions on Third World loans and an ill-starred venture with a Brazilian bank.
And still Mr. Sullivan faces further problems: The global corporate bank has high concentrations of HLT credits and commercial realty credits.
In a warning that analysts following First Chicago take very seriously, Mr. Sullivan for months has been describing the realty industry as being in a "depression."
"First Chicago's global corporate bank never earned an adequate return during the 1980s," said Henry Dickson, a banking analyst with Kemper Securities Group, Chicago.
PHOTO : Barry F. Sullivan Has had no clear successor