Twelve months into the rollout of its consumer banking strategy, Wachovia Corp. officials say the plan appears to be working.

The strategy has "been central to the earnings momentum of the consumer bank in 1997 and will be equally so in 1998 and 1999," said Stanhope A. Kelly, Wachovia's senior vice president of consumer banking.

By January, the Winston-Salem, N.C., company will have new systems installed throughout the Carolinas and Georgia. Its Virginia and Florida operations will come on-line in mid- to late 1998, according to Mr. Kelly.

The officials said that this year the strategy helped drive:

A $420 million increase in deposits in the company's core markets. This total does not include recent acquisitions in Virginia and Florida. The rise also came after the divestiture of about $270 million of deposits in markets that Wachovia is leaving.

The addition of 119,000 customer households in its core markets.

A $9.7 million reduction in retail expenses, which doesn't include cost savings from the Virginia and Florida acquisitions.

A one-in-three closing rate on sales leads.

Wachovia also reported impressive results when it tested a new "financial integration" strategy aimed at affluent customers.

Most of the gains stem from what Wachovia calls its Profitable Relationship Optimization strategy, or PRO. The PRO data warehouse system uses individual profitability measurements to generate targeted leads for the company's sales force.

The PRO system is delivering about 2,500 sales leads a day to a team of 600 salespeople. By the end of next year, Wachovia intends to double its generation rate for sales leads.

The $49.9 billion-asset company is also expanding its market network strategy, which focuses on building a network of carefully selected sales sites in targeted markets. The strategy relies on computer modeling techniques to create an optimal mix of traditional branches, ATMs, express financial service centers, and in-store branches.

Using that information, Wachovia has been building up its presence in some markets and scaling back in others. The company sold 14 branches this year after reviewing market network analyses.

"Every strategic and tactical decision we make passes through these filters," Mr. Kelly said.

Bank analyst Thomas K. Brown of Donaldson, Lufkin & Jenrette said he expects the new strategies to help Wachovia achieve a 15% gain in earnings per share next year.

"The early results are so amazing," said Mr. Brown. A successful implementation of consumer bank initiatives, he said, could decide whether Wachovia remains independent.

According to Mr. Brown, the "great thing" about Wachovia's strategy is that it is "different than that being employed by First Union and NationsBank. It is truly local delivery and localized and targeted sales efforts."

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