John Torell Resigns as Bank’s President

Manufacturers Hanover Corp. has announced the resignation of President John Torell, news that surprised banking analysts who had viewed Torell as the heir apparent to Chairman John McGillicuddy.

Torell’s resignation occurred in the midst of a severe shakeout in the commercial and investment banking industries, which was exacerbated by the Wall Street crash in October.

A spokesman for Manufacturers Hanover, the nation’s sixth-largest bank, said Torell’s departure was not connected in any way to the bank’s restructuring plans.

“The decision was taken at the initiative of Mr. Torell and was accepted by the board with the deepest regret,” McGillicuddy was quoted as saying.

Torell, 48, said in a news release from the bank that, after a 27-year career at Manufacturers Hanover, including 10 years as a director, “it is time for a change.”

Manufacturers Hanover said the board was looking inside and outside the bank for Torell’s replacement.

“I was really surprised,” said Lawrence Cohn with Merrill Lynch and Co. “I had thought he was going to be the next chairman--everybody did.

“This is not what I’d call a planned management succession,” Cohn said. “This was out of the blue. I don’t know if there was a conflict between Torell and Chairman McGillicuddy, or what the story is.”

Manufacturers Hanover, saddled with billions of risky Latin American loans, has cut its staff by nearly 20% since the beginning of 1986.

In January, the bank said it was closing some domestic offices and restructuring its remaining businesses to enhance shareholder value. The bank, whose equity-to-asset ratio is below the 4% that analysts consider healthy, said it was hoping to boost earnings by $95 million with these moves.