SAN FRANCISCO -- Wells Fargo & Co. has eliminated the post of chief credit officer as part of a sweeping reorganization aimed at giving the bank more firepower in the marketplace.

Effective in late July, vice chairman and credit chief Michael J. Gillfillan took a new job as head of commercial and corporate banking. As Wells' senior credit officer, Mr. Gillfillan had been responsible for working out problem credits and managing risk throughout the bank's various loan portfolios.

In reassigning Mr. Gillfillan, San Francisco-based Wells jettisoned the top credit job. Instead, the functions of a centralized credit operation were divided among business lines.

Under the new setup, commercial, real estate, and retail banking each have their own credit officer reporting directly to the business unit head. Similarly, each unit now has its own loan workout group responsible for collecting problem credits.

The new credit structure was a key pan of a broad shakeup of Wells' senior management carried out after last month's announcement that chairman and chief executive Carl E. Reichardt would retire at yearend.

Wells disclosed the changes in a July 28 memo to its staff. American Banker obtained a copy Wednesday.

In the reorganization, president Paul Hazen, slated to replace Mr. Reichardt as chief executive, now supervises wholesale banking operations. Previously, financial and staff functions, plus Mr. Gillfillan's credit unit, reported to him.

Vice chairman William F. Zuendt, who will succeed Mr. Hazen as president, will concentrate on retail banking. Under the former setup, both retail and wholesale business units reported to him.

Within wholesale banking, which used to report to vice chairman Charles M. Johnson, international banking, commercial lending and real estate have been separated. Mr. Johnson kept real estate and international operations, while Mr. Gillfillan took the commercial portfolio.

The reorganization means that each of Wells' major revenue-producing units is now directly under the authority of a top-ranking officer. The bank said the changes are designed to concentrate executive attention on building business as California's economy rebounds. "We're really focusing on business development," a spokeswoman said.

A Sign of Recovery

The bank's renewed emphasis on growth also signals its recovery from the loan problems that plagued it at the beginning of the decade.

During the last three years, much of Wells' time "has been spent in preserving and recovering our wholesale business, while cautiously growing our retail side," noted Mr. Hazen in the July memo. "To seize market opportunities .... we need to direct our energy to growth while still maintaining appropriate credit standards."

California bankers say that competition in the state's commercial lending market is at a high pitch, with credit demand still weak and major banks loaded with cash and hungry for revenue.

Wells is said to be one of the most aggressive in the search for new business.

Analysts applauded Wells' focus on marketing, but some questioned the new System for credit management.

They said a senior executive generally has the clout to block lending when it becomes excessively risky. That is more difficult to accomplish when the credit official reports to a line officer responsible for business development.

"I am usually more comfortable with banks that have a chief credit officer," said James M. Rosenberg, analyst with Lehman Brothers. "It's a good idea to have one guy on top providing an overview."

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