When Michigan National Corp. was taken over by an Australian bank a year ago, rivals' advertisers had a field day.

In radio spots, actors with thick Australian accents spoke of threats to transfer Michigan National bankers to "the outback." But more serious critics wondered how the down-under corporate culture would mesh with a struggling American bank that had suffered from years of mismanagement.

Douglas Ebert, Michigan National's chief executive officer, maintained in a recent interview that since the takeover by National Australia Bank Ltd. last Nov. 2, the $9 billion-asset Michigan bank has focused on recapturing business lost during its years of distress.

The 51-year-old Mr. Ebert, a tall, lean banker with a reputation as a turnaround specialist, said the $134 billion-asset National Australia gave Michigan National muscle it couldn't develop itself.

"We've got the resources and reach of a (large) institution, yet we're small and flexible," said Mr. Ebert, who, in addition to becoming a multimillionaire from the sale of Michigan National, was promoted from president to CEO when National Australia took over.

Michigan National's recovery may be another example of the boost that a foreign owner can bring. ABN Amro Holding of the Netherlands and Royal Bank of Scotland had the same positive effect on LaSalle National Corp. in Chicago and Citizens Financial Group in Providence, R.I., respectively.

Based in Farmington Hills, an upscale Detroit suburb of vast, manicured lawns and red-brick strip malls, Michigan National is focusing on consumer lending and a handful of high-margin fee businesses, such as trust and insurance.

On the commercial side, it concentrates on small-business lending and cash management, bank card processing, and 401(k) pension services.

Moreover, Mr. Ebert is considering acquisition to allow Michigan National to reenter businesses it had to leave under duress, such as mortgage banking and credit card issuing. He and his team are scouting for bank deals in the Midwest.

While these strategies sound similar to those of other leading Midwestern banks, Michigan National is shaking off its image as a badly beaten-up company. Anticipating further industry consolidation, Mr. Ebert said Michigan National will be a buyer.

Three years ago, when Mr. Ebert came aboard as president and chief operating officer, Michigan National was slashing costs and selling businesses. His predecessor, Robert Mylod, had built a monument to himself in the form of an expansive colonial-style brick headquarters - a building that came to symbolize mismanagement and excess. The building formerly housed 600 people, and included a 30,000-square-foot fitness center. Today, it houses twice as many employees. The fitness center - the first casualty of Mr. Ebert's "Project Streamline" - is long gone.

The new Michigan National has shifted its focus. It spent nearly $175 million in the third quarter to train employees, particularly in sales, and to upgrade its technology. Noninterest expenses more than doubled from the second quarter to the third quarter to pay for what Mr. Ebert views as investments in customer-friendliness.

"The key to the banking industry is customers," Mr. Ebert said. "That's where the banking industry has continued to struggle."

Michigan National has its work cut out for it. One of its in-state rivals views the bank as less competitive than before. "We don't bump into them as much as we used to before the acquisition," said David F. Simon, chairman of Franklin Bank in nearby Southfield.

Mr. Simon's bank specializes in loans to small and middle-market businesses. It did the radio commercials that poked fun at the Australian takeover.

Mr. Ebert responded that Michigan National is making money. The bank earned $23 million in its third fiscal quarter, which ended June 30 - up from $15 million in the second quarter. Fourth-quarter results were not available.

Though the company is investing in its future, it is managing to keep an eye on other costs. Mr. Ebert said Michigan National hopes to shave two to three percentage points off its efficiency ratio - currently at 65% when goodwill from the merger is factored in.

As chief executive in Michigan, Mr. Ebert answers to executives in Melbourne. National Australia officials - such as chief operating officer Alan Frankenburg and strategic planning director Kuldeep Kishore - work in Farmington Hills to make sure the bank toes the line of the parent.

The bottom line is meeting targets, Mr. Ebert said. "The price of autonomy is performance. We indicated what we could do to perform. We deliver that and continue to grow the organization for the shareholders," he added.

For National Australia, Michigan National provided a long-delayed entry into the U.S. market. The Australian bank described the acquisition, a $1.5 billion cash deal, as a "low-risk" foray, and it has made it clear it wants to do additional deals here.

Michael Moran, an analyst with Detroit-based Roney & Co., believes National Australia will have to make some acquisitions in the Midwest just to recoup its initial investment.

Among the companies Mr. Moran views as potential targets for Michigan National are $1.5 billion-asset Republic Bancorp in Owosso, Mich., which he predicted would sell for $250 million to $275 million; Citizens Banking Corp. in Flint, a $3.5 billion-asset company that could cost $600 million; and D&N Financial Corp., a $1.4 billion-asset Hancock thrift, which would sell for about $150 million.

Mr. Ebert said mergers will be on his to-do list in the coming year, but they not necessarily at the top. More important, he said, is winning back market share, developing employees, and building infrastructure.

For the first time in several years, Mr. Ebert is not working for a bank that is being dressed up for sale. That challenge suits him fine.

"Building something is harder than turning something around," he said.

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