MEMPHIS - The new head of retail banking at Union Planters Corp. said he is committed to building its noninterest and nonbanking income - through internal growth and perhaps yet another acquisition.

Alan W. Kennebeck, who was named a senior vice president in February, said in an interview this month that the $33 billion-asset company must establish itself as a source of nonbanking products.

Union Planters was the only top-25 U.S. banking company to miss analysts' 1999 profit expectations by more than a penny a share. In January the company announced that it would come up 12 cents short.

"It is important for clients to recognize that they can come to our stores and get investment services as well as banking products," Mr. Kennebeck said. "If we can do an acquisition with an investment management firm, I am going to be receptive to that."

Mr. Kennebeck, who formerly headed the investment division of Amcore Financial Inc. in Rockford, Ill., said he would also be open to an alliance instead of an acquisition.

The goal, he said, is to boost noninterest income to at least 40% of revenue, from about 25% now.

"My mission here is to drive fee-based income upward," he said. "Our challenge is to bring our 900 branches in 12 states together as entrepreneurial units armed with all the tools that customers want."

Christopher T. Kelley, an analyst with Morgan Keegan & Co. in Memphis, said revving up investment operations might be just what Union Planters needs to get its momentum back.

"The brokerage firms captured from banks that high-growth customer that the banks want," Mr. Kelley said. "If you want those customers back, it makes sense to go buy a brokerage."

Mr. Kennebeck said he would like Union Planters, which has about 70 series 7-licensed brokers, to have about 400 in the coming years. Some branches probably would not need a broker, he said, but some in affluent areas could wind up with more than one.

Union Planters also wants to boost its proprietary mutual fund line, which currently has just $500 million invested, he said.

Mr. Kennebeck said steps have been taken to make sure there will be no earnings surprises this year. Shares of Union Planters fell almost 25% in the wake of the January earnings announcement; they were trading at $29.5625 at mid-day Thursday.

Much of the problems in 1999 stemmed from Union Planters' aggressive expansion. It bought 28 banks in a three-year span, and the rapid growth produced a lot of overlap. At one point, for example, it had more than 4,000 different types of savings accounts.

The back-office consolidations are complete, deposit offerings have been standardized companywide, and Union Planters is standardizing products on the lending side to make sure different regions use the same scoring methods and terms when making loans.

Mr. Kennebeck said he plans to meet with regional executives quarterly to encourage them to work together and get behind the products he is creating.

"Our products have to be broad enough to compete nationally, but the market executives have to be able to use the products to his advantage, and change them when he must," he said. "It requires lots of communication, probably more than I ever imagined. We have to learn from each other."

Mr. Kennebeck said he "would be less than honest if I said that all of our local CEOs are currently completely in alignment," but added that they have been receptive to his ideas.

"We have all the pieces in place to allow our executives to do their jobs," he said. "We are positioned to move our clients through our system to give them the level of expertise they need."

Morgan Keegan's Mr. Kelley said that if Union Planters succeeds, selling investment products could ultimately justify its buying spree.

"The acquisitions were an asset-growth strategy that has not really translated to stellar returns to shareholders," the analyst said. "I think focusing on leveraging the locations and people you have amassed by getting them more products is probably a good plan of attack."

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