Bank One Corp.’s sale to J.P. Morgan Chase & Co., valued at $58 billion, ranks as the third-most expensive bank deal in history. But a merger and acquisition expert predicts that in a few years it might not look so large.
Graeme Deans, a vice president with executive consultant firm A.T. Kearney, expects the next large bank deals will be global moves with huge price tags. Midsize banks in the U.S. will find themselves targets of bigger banks around the world, he said.
“The globalization movement is a natural step,” said Deans, author of “Stretch: How Great Companies Grow in Good Times and Bad.”
The Chicago area already has felt the global reach of some financial players. LaSalle and Harris banks, the area’s second and third largest, are foreign-owned–LaSalle by ABN Amro of the Netherlands and Harris by BMO Financial Corp. of Montreal.
Three banks–HSBC in London, Citigroup in the U.S. and Deutsche Bank in Germany–have about 12 percent of the interest and fee income worldwide, Deans said.
“Within 10 years, we predict the top three players will have about a 30 percent share globally,” he said. “You’ll see more banks with trillions of dollars in assets and deals worth hundreds of millions.”
Walgreens keeps Bank One: Bank One has extended its deal to provide teller machines in Walgreens’ Chicago-area drugstores.
The bank has ATMs in about 350 Walgreens in the area, and that number is expected to grow to 390 in the next two years.
“The partnership with Walgreens is terrific from Bank One’s point of view, and we think Walgreens has gained from it as well,” said bank spokesman Tom Kelly.
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Bank One is also Deerfield-based Walgreens’ teller machine provider in Indiana, Wisconsin and Louisiana, and will soon be adding stores in Texas.
The five-year agreement extends a partnership that began in the early 1990s with Bank One’s predecessor, First National Bank of Chicago.
Community banks hiring: This might be a good year for those working at community-based banks.
In an era when many large banks are reducing the number of employees to cut expenses, a recent survey of community bank executives found 58 percent anticipate increasing their workforce in 2004.
In addition, a third of the community bankers surveyed said they plan no changes in the number they employ.
The survey by accounting firm Grant Thornton also found that 93 percent of community bankers say “retaining key employees” is vital to continued success.
To compete with larger institutions, community banks often specialize in certain financial services and emphasize customer service to differentiate themselves.
Grant Thornton surveyed 448 bank chief executives and senior officers. The study has a margin of error of plus or minus 5 percent.