Date: Fri 19-Feb-1999

Publication: Bee

Author: CURT

Quick Words:

Fleet-Bank-of-Boston-merger

Full Text:

Merger Hailed By Small Connecticut Banks; Customers Not So Sure

By Denise Miller

Associated Press

TRUMBULL -- Robert Foley felt like he was taking a stand when he switched from

Fleet Bank to BankBoston six weeks ago to protest Fleet's checking transaction

fees.

On Monday, he found out he will become a Fleet customer again -- like it or

not.

Fleet Financial Group Inc. plans to acquire BankBoston Corp. in a $16 billion

deal that has some Connecticut customers worried how they will be treated by

the new megabank.

"I don't like it at all," said Foley. "I'm worried it's going to have the end

result of what I just tried to get away from."

"It's so big that they can get away with charging more fees," he said.

The combined bank will be the dominant lender in New England and the nation's

eighth-largest bank. To some customers, however, bigger is not necessarily

better.

Ralph Palmesi, an attorney, did his banking at Shawmut until it was acquired

by Fleet in 1995. He hasn't been happy with the bank since that merger.

"You call now and you get 17 different numbers to press," he said. "Getting

the personal service is just not there."

But other customers were nonchalant about the merger.

"It's no big thing to me. I think (the service) will be the same," said Lisa

Crosby, an administrative officer from Shelton who banks at the Fleet branch

in Trumbull.

Smaller banks in Connecticut are hoping to capitalize on Fleet and BankBoston

customer concerns by emphasizing their own more localized service.

The state has roughly 65 community and mid-sized banks who are looking at the

merger as a chance to lure disgruntled customers.

"It's a great day to be a community banker," said John Carusone, president of

the Bank Analysis Center, a Hartford-based bank consulting firm. "They compete

on the basis of personalized service and flexibility of response ... and the

larger and more impersonal and less flexible the competition looks, the better

the community bank looks."

Some midsize banks in Connecticut also saw opportunity in the merger.

Eugene McQuade, chief financial officer for Fleet, said the two banks expect

to have to divest about $13 billion of their $180 billion in assets, including

approximately 24 branches in Massachusetts, Connecticut, Rhode Island and New

Hampshire.

Waterbury-based Webster Bank bought 20 branches and $850 million in assets

after Fleet acquired Shawmut in 1995. Spokesman Michael Bazinet said the

105-branch bank will look into acquiring additional branches through the

Fleet-BankBoston merger.

Bridgeport-based People's Bank, the largest Connecticut-based bank with 128

branches, said People's will also consider buying divested branches and

angling for disgruntled customers.

"Anytime there's consolidation in the banking world, that creates

opportunities for banks who are focused on the local market," said George

Morriss, People's chief financial officer.

Fleet Boston officials acknowledge they may have to cut as many as 5,000 jobs

from their total work force of 59,000.

Fleet spokesman Jim Schepker said the company expects the impact in

Connecticut to be minimal because there is not significant overlap between the

two institutions in the state.

"There is less consolidation likely here in Connecticut than there would be in

the other states," he said.

In response to customer complaints about megabanks, Schepker said the merged

company will provide consumers with a wider choice of banking products,

greater convenience and access.

"While we may not satisfy every consumer on every level, we do want to serve

our customers well on every level, and for most of them that means providing

them with the greatest possible value given the product quality and given the

price," he said.