Big Banks Seek Market Clout as National Chains : Finance: Institutions look to McDonald’s for marketing ideas as megamergers create multistate branch networks.

The man who brought you checks with sea gulls and sunsets is heading what will probably soon become the largest bank in America, a sign of the new age of marketing-driven coast-to-coast banking.

Richard M. Rosenberg, chairman of the new BankAmerica, is a bank products salesman built like a fireplug and eager to duke it out with financial superpowers emerging in places like Charlotte, N.C., and Columbus, Ohio.

He knows that by the end of the decade, retail banking will be a lot like selling stereos or soda pop. There will be a handful of national brand names, standardized services from Oregon to North Carolina and a lot fewer banks than there are today--about 9,000 fewer, by his count.

Names like NationsBank and Bank One will pop up on signboards alongside McDonald’s and Sears across the country, offering fast cash, credit cards, consumer loans and money market funds as convenient and neatly packaged as breakfast burritos. Expect big advertising budgets --Michael Jackson plugging Citicorp?--and, maybe, fees on credit cards dropping like the price of hamburgers in recent years. (But, watch out for increased charges elsewhere.)

With upcoming changes in Depression-era banking legislation and megamergers on the rise, American banking “will go the route of other retailing,” says George Parker, professor of management at Stanford’s Graduate School of Business.

Will the First Bank of Main Street be a thing of the past? Probably not. Experts say better community banks will still deliver services big banks can’t or don’t want to and will not only survive, but thrive. Many small banks will continue to be more profitable than big ones.

Like airline deregulation, easing banking laws to allow national banking won’t necessarily make a lot of money for its practitioners or necessarily be an unqualified victory for consumers.

Wherever the industry is headed, the action is no longer centered among the pin-striped gentlemen in New York. Regional powerhouses built up from community banks focusing on mom and pop instead of Third World magnates are ushering in a brave new world of banking.

The new banks are led by strong personalities who dominate their companies like small-town notables. Though their initial scale was small, their vision--particularly of the uses of technology to shrink the continent to a single market--is broad.

John B. McCoy, an outwardly mild-mannered banker in Columbus, Ohio, is seen in the business as Rosenberg’s sharpest competition. He runs Banc One Corp., the firm previously headed by his father and grandfather, like a monastery: no alcohol at lunch, no coffee on desks and no waste anywhere in its fast-growing network. But in his branches (which go by Bank One), if neon signs and in-house travel agents will attract customers, he doesn’t hesitate to install them. His managers get a lot of freedom in operating branches--as long as they meet strict profitability requirements, monitored minutely on financial software that’s the envy of the industry.

McCoy in 1990 acquired a branch network in Texas from the failed MCorp, and his branches extend over seven states. Many are open on weekends. He wouldn’t touch highly leveraged transactions or Third World debtors with a 10-foot pole and has built his Rust Belt business by buying up small banks cheap and making thousands of small, steady loans. His bank makes a lot of money processing other bank’s credit cards. The giants look to him for the newest banking technology--and some of the highest profits in the industry.

A long drive southeast from Ohio to North Carolina, ex-Marine Hugh McColl has created another “super-regional” bank that’s making the Yankees at New York’s old-line money-center banks shudder. By planning to acquire Atlanta-based C&S;/Sovran, McColl is turning his bank, NCNB, into the fourth-largest in the country. His aggressive tactics are considered risky by some, and he’s not afraid of intimidating potential takeover targets. Unlike McCoy, McColl has international ambitions and wants to get into merchant banking, competing with big New York investment banks.

Meanwhile, the Old Guard of banking is trying not to blink in the face of the challenge from the provinces. John Reed, chairman of Citicorp, the nation’s biggest bank with $217 billion in assets, needs to restore confidence. The bank is struggling to increase its capital, and the stock market has given the company a thumbs down, further weakening its ability to acquire the banks it needs to build a nationwide network.

Unlike the regional powers, Reed is burdened with troubled international loans and lending tangled up in the leveraged buyout mess of the 1980s. Even after paring a planned 17,000 workers from Citicorp’s 95,000 work force, he will still be struggling to centralize the sprawling bureaucracy.

Citicorp still boasts talented management and a tradition of innovation--it helped create the giant U.S. credit card market--and its worldwide services attract retail customers in sleek branches from Tokyo to London. But analysts expect Reed won’t be able to clear up his problems before BankAmerica nudges it out of first place in assets, while the regionals charge ahead in profitability.

BankAmerica, after it merges with Security Pacific, will enjoy the richest franchise in America with its branch network in 10 Western states. It has the potential to slash costs by cutting redundant branches while maintaining its customer base, and it’s got a huge credit card business.

The weakened state of Citibank will help protect B of A from an onslaught in its home market. Many analysts expect B of A’s size to help its cost-conscious executives.

B of A will have to keep an eye on yet more challengers that are rising from the provinces. Wachovia Corp., another North Carolina innovator, is spreading throughout the Southeast, and Fleet/Norstar is mopping up the troubled New England market with aplomb.

What’s pushing the change is the ongoing breakup of America’s half-century-old banking laws, designed to protect the little bank and the little customer. A couple of wars and more than five decades later, there are 20 banks in Japan and Europe bigger than America’s biggest, and Citibank and B of A look like the little banks in the world. Most aspects of banking, from corporate lending to credit cards, have overcome state borders, and the laws forbidding a bank from taking deposits in different states look a little outdated.

So Congress has plans to bring American banking law into the ‘90s, possibly allowing deposit-taking at nationwide branch networks and more stock broker-like activities for banks to help strengthen them domestically and help them compete internationally.

National networks will give these banks economies of scale.

“Banking is increasingly a commodity business,” said Raphael Soifer, a banking analyst at Brown Bros. Harriman. One credit card isn’t that different from another, and consumers are happy to switch their borrowing to banks based in North Dakota, Arkansas or at some 800 number that could be Santa’s workshop for all they know.

In fact, the “manufacturing” end of banking, the immensely profitable business of processing credit cards and bank accounts, is already national, with electronic impulses sending out piecework to computer sweatshops far from the high-labor-cost markets like California where money comes from.

Cost, then, will be king. Tightfisted companies like Banc One have a great advantage. And smart marketers will get their volume up to reach those economies. Advertising agencies are already salivating over the possibilities.

Meanwhile, all of these bankers have to look out for competition from left field: General Electric, AT&T;, Sears and American Express are competing with banks in credit cards, consumer lending and other parts of the banking business while securities houses continue to siphon off deposits into money market funds.

At the same time that banking is being concentrated into fewer, larger institutions, many banking functions are already being offered outside traditional banks. You can get cash served up with your french fries at Carl’s Jr. and loans through a car dealer instead of a bank; you can get credit from Sears or the phone company if you want it.

In the end, experts say the advent of national banking won’t be earth-shattering for consumers. In many ways, it’s putting a name on a fait accompli.

National Banking Contenders

BankAmerica’s proposed merger with Security Pacific steps up the race for nationwide banking. As regulations relax, a few big banks will vie for customers nationwide. The following banks are among the most aggressive in building multistate branch networks and expanding credit-card business.

BankAmerica (Planned merger of BankAmerica and Security Pacific) CEO: Feisty Richard M. Rosenberg is known as a marketing genius and leads a cost-conscious staff of Wells Fargo alumni. Branches: California, Arizona, Alaska, New Mexico, Texas, Nevada, Oregon, Idaho, Washington and overseas. Citicorp CEO: John S. Reed, who took the helm of America’s biggest bank in 1984, is stumbling on bad loans and low capital, limiting expansion plans. Branches: New York, Maryland, Maine, Washington D.C., Florida, California, Arizona, Illinois, Nevada and overseas. Banc One CEO: Third-generation banker John B. McCoy runs a tight back office but doesn’t skimp on neon to attract customers. His super-profitable bank sticks with retail business, avoiding risky international lending. Branches: Ohio, Michigan, Kentucky, Indiana, Illinois, Wisconsin and Texas. NationsBank (Planned merger of NCNB and C&S;/Sovran) CEO: Acquisitive Hugh L. McColl Jr. is known for taking risks that so far look smart. Merger of his NCNB with C&S;/Sovran will create NationsBank, the country’s fourth largest. Branches: North Carolina, South Carolina, Washington D.C., Florida, Georgia, Kentucky, Maryland, Tennessee and Virginia.