Synovus Financial Corp. has created a subsidiary to provide support services for itself and its credit card processing subsidiary, Total System Services Inc.
The move is expected to yield significant annual cost savings for the holding company by eliminating duplications.
The president of the new unit, Synovus Administrative Services Corp., is Kenneth E. Evans, formerly vice chairman of Total System.
Similar functions within Synovus Financial and Total System will be consolidated, including strategic planning, investor relations, human resources, and risk management.
"We have two public companies, and we had created separate support structures within those companies," Mr. Evans said. "Now we're going to combine them in one company.
"This is a move designed to further the strategic direction of Synovus toward modernization and increased efficiency in its operations," he added.
Mr. Evans said Synovus had not yet determined how much it will save from the consolidation, but he predicted the amount would be "significant," probably "millions of dollars" a year.
Synovus, a $7.3 billion-asset banking company based in Columbus, Ga., reported $367 million of noninterest expense last year. At Total System, in the midst of a long-term system upgrade, expenses have been increasing faster than revenues in recent years.
Mr. Evans said Synovus Administrative would earn revenue through management fees charged to Synovus Financial and Total System. It will not have outside sources of revenue.
"We will not be offering these services outside our family of companies," he said.
Mr. Evans has been with the Synovus group for 22 years. He was executive vice president and secretary of the holding company before becoming vice chairman of Total System in 1990.
Mr. Evans said he will remain a director of Total System and an executive of Synovus Financial.
In addition to its 80.8% interest in Total System, No. 2 in card processing to First Data Corp., Synovus owns a brokerage, Synovus Securities Inc., and 34 community banks in Georgia, Alabama, Florida, and South Carolina.
The flagship bank is Columbus Bank and Trust Co., which has $1.5 billion of assets.
