Orioles affinity cards traded to MBNAThe Orioles are...

BANKING & FINANCE

June 24, 1993|By David Conn | David Conn,Staff Writer

Orioles affinity cards traded to MBNA

The Orioles are leaving town! But chances are, almost no one will notice this move.

The Orioles VISA and MasterCards, formerly issued by Provident Bank of Maryland, have been sold to MBNA America Bank N.A., the Newark, Del., credit card giant.

Customers of the affinity card program will hardly be affected by the move, says Provident President Peter Martin, but they should receive new cards (with new account numbers) this week. And there's a bonus: a new Oriole Park at Camden Yards design.

Provident, seeing the industry's increasing bias toward size, sold its roughly $20 million portfolio of credit card receivables to MBNA a few months ago.

"We see the increased competition in the credit card business," Mr. Martin said. "We see bigness being important for profitability."

The bank still will offer credit cards to its customers, but only as an agent, not an issuer. Since all processing was done by a South Carolina company, very few Provident employees will be affected.

The baseball credit card program is a natural for MBNA, formerly a subsidiary of MNC Financial Inc. "Baltimore fans are unique. They are very loyal," said spokesman David Spartin. Besides, he added, "there are a lot of Oriole fans at MBNA."

USF&G's Stanard runs reinsurance outpost

Somebody's gotta take the tough assignments. At USF&G Corp., James N. Stanard was that somebody. Last week he opened the doors of Renaissance Reinsurance Ltd. -- in Hamilton, Bermuda.

Mr. Stanard, 44, is an 11-year veteran of USF&G, most recently as executive vice president in charge of claims and reinsurance activities. He joined in 1983 to help create and run the company's F&G Re subsidiary, now one of its most profitable units.

Mr. Stanard says he got the idea for setting up a new reinsurer last fall when he "realized that there was a crying need for capacity in the worldwide [reinsurance] catastrophe market." The gap evolved from the losses from Hurricane Andrew, several other weather-related catastrophes and the enormous losses at Lloyd's of London.

USF&G Chairman and CEO Norman Blake gave Mr. Stanard the go-ahead and the support to create Renaissance, and the company pitched in $20 million of the initial $140 million in capitalization. Other investors include two General Electric Co. investment subsidiaries, at $25 million each, and investment banker E. M. Warburg, Pincus & Co. Inc., which ponied up $70 million.

(Like many other insurers, Renaissance chose Bermuda because it does not impose corporate or personal income taxes.)

Although essentially a two-person operation for now -- Mr. Stanard's second-in-command is Neill A. Currie, formerly with reinsurance broker E. J. Sullivan -- the Renaissance team won't be lonely. Two other reinsurers have formed on Bermuda in the last several months, and more are rumored to be on the way.

But talk about your killer commutes: Mr. Stanard plans to spend weekends with his family in Baltimore.

Keefe, Bruyette lists 50 best banks

"Now that both the Academy and Tony awards have been broadcast, we feel duty-bound to fill the subsequent void by supplying new information on the bestowal of honors," declares Keefe, Bruyette & Woods Inc., one of the most respected voices in bank stock research.

What on Earth are they talking about? Why it's Keefe, Bruyette's quarterly BankScan awards, where the 50 best banking companies are ranked. Criteria include the level of nonperforming assets; the ratio of equity to assets; loan-loss reserves; and a pretax return on assets ratio.

Of the 50 "best banks" in the nation, Baltimore's Mercantile Bankshares Corp. ranked 28th in the first quarter, according to Keefe, Bruyette. Mercantile, parent of Mercantile-Safe Deposit & Trust Co., historically has been among the safest banks. Because its capital is so high, it never stands out in return on equity contests. But Keefe, Bruyette's profitability criterion looks at return on assets, a measure that allows Mercantile to shine.

Unlike the prophets, Mercantile also enjoys honor at home. Alex. Brown & Sons analyst John Heffern this month issued a report on community banks with a "buy" rating on Merc's stock. He says the NationsBank Corp. takeover of MNC will give Merc "opportunities for gain, rather than potential for loss."

"Customer concerns about loan officers following lending policies served up by a Charlotte, N.C., headquarters staff can be a powerful marketing tool for local banks," Mr. Heffern maintains.

Poll shows support for financial planning

"Nearly Two-Thirds of Americans See Benefit of Professional Financial Advice," declares the headline.

OK, so the International Association for Financial Planning may not be the most objective source of news on this topic. But it did commission the Gallup Organization to do the study.

In the poll of 1,000 adult Americans, 33 percent said the advice of a financial adviser would be very beneficial, up from 19 percent in 1989. Twenty-one percent said it would not be beneficial at all, down from 31 percent in 1989.

What's IAFP's conclusion? "The investment options are far more complex now, and people have less and less time to spend figuring out what's right for them," according to the group's president.

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