Changing Bank Lineup : Mergers Are Creating Huge Institutions, Altering Rankings
Bank mergers are altering the American banking landscape, with new powerhouses rising to dominate the industry for at least the remainder of the decade.
Three of the nation’s five biggest banking companies are the products of mergers, whether approved or pending, according to a list of the nation’s top 25 banks by asset value as of the end of 1991. The list takes into account mergers that have been announced but not consummated.
Citicorp of New York, still the nation’s biggest banking company, fell a modest $70 million in assets last year, despite its need to raise capital ratios. One way to do this is by cutting assets.
The banking giant has been hurt by problem real estate loans.
Its lack of growth make it unlikely that Citicorp will improve its world standing. It slipped from 10th place in 1989 to 21st in 1990, the latest year for which global statistics are available.
The list shows that San Francisco-based BankAmerica Corp. will be able to retain its second-place slot only if a proposed $4-billion merger with Los Angeles-based Security Pacific Corp. wins approval from federal regulators, which it is likely to do.
The merger would also bring BankAmerica a giant step closer to reclaiming its one-time first place ranking from Citicorp by piling another $76 billion onto its asset base.
Without merging, BankAmerica would be in third place behind Chemical Banking Corp. Security Pacific would rank seventh.
Chemical Banking Corp. surfaced Dec. 31 as the product of a merger between Chemical and former New York rival Manufacturers Hanover Corp. The combination lifted Chemical into the No. 3 slot from No. 6 in 1990.
J. P. Morgan & Co., the blue chip New York bank, lost its No. 4 ranking to NationsBank, the new Southern banking giant produced by the marriage of NCNB Corp. and C&S;/Sovran Corp.
Analysts believe that the three merger-created banks in the top five category will continue to grow through acquisitions once their current mergers have been digested.
Another banking company that appears to have an acquisitive inclination is Banc One Corp. of Cleveland, whose merger activity allowed it to leap into the No. 8 slot last year from No. 22 a year earlier. That assumes that all its pending takeovers take place.
Other banks that shot up in 1991 included Fleet/Norstar Financial Group, which bought failed Bank of New England; Norwest Corp., the acquirer of United Banks of Colorado; Wachovia Corp., which bought South Carolina National, and First Union Corp., the buyer of failed Southeast Banking.
