Banc One's Halcyon Days of Merger Integration

Abstract

The year 1992 had been most successful for Banc One placing it first among the 25 largest banks in the United States. It had achieved this stellar record through a strategy of nuts-and-bolts banking that included focusing on serving retail and middle-market customers through community banks, investing in technologies that created competitive advantages, and treating bank acquisitions as an ongoing line of business. The newly appointed chairman of Diversified Services at Banc One is responsible for products in the nonbanking areas of securities, insurance, leasing, consumer finance, asset management, and mortgage. But the growth of Diversified Services has fueled apprehension that the fundamental values on which the bank's success had been built were changing. In this context, the chairman is charged with persuading the presidents of the affiliate banks to adopt his nontraditional banking products into their local banks to enlist them in a strategic partnership with Diversified Services.

Excerpt

UVA-BP-0553

Jan. 25, 2012

Banc One's halcyon days of merger integration

Through the 1980s and 1990s, Banc One Corporation (Banc One) was heralded as best in class in the bank expansion-through-acquisitions game, and 1992 proved to be its most successful year ever. That year Banc One completed a series of acquisitions that made it the nation's ninth-largest bank. It achieved a 24% to 32% increase in earnings for its 24th consecutive increase and delivered 10-year average returns on equity and assets, placing it first among the 25 largest banks in the United States. In 1991, Institutional Investor named Banc One “America's best-run bank.”

Paul Walsh was the newly appointed chairman of Banc One Diversified Services Corporation (Diversified Services) with responsibility for products in the historically nonbanking areas of securities, insurance, leasing, consumer finance, asset management, and mortgage. His charge was to persuade the presidents of the affiliate banks to adopt his nontraditional banking products into their local banks.

The Banking Industry

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Keywords: banking services, strategic partnerships, uncommon partnership, nontraditional services, middle-market customers, expansion-through-acquisitions, corporate structure