NationsBank CEO defends cost cuts in Barnett deal McColl also says there will be fewer firings than some have projected

Banking

September 03, 1997|By BLOOMBERG NEWS

NEW YORK -- NationsBank Corp.'s Chief Executive Officer Hugh McColl yesterday defended cost cuts that his bank foresees associated with its agreement to buy Barnett Banks Inc., and said the bank won't need to cut as many jobs as Wall Street projects.

NationsBank said Friday that it would buy Jacksonville, Fla.-based Barnett for $14.6 billion and cut approximately $915 million in costs by 1999.

"Wall Street will think that we would find it more difficult than we have in the past to take costs out of the operation," McColl said yesterday.

McColl said the bank has repeatedly shown that it knows how to cut costs. NationsBank was able to cut 60 percent of the costs in connection with its $1.69 billion purchase of Bank South Corp., which closed in January 1996, he said.

"We've proven that we know how to do an in-market merger," said McColl. "We've clearly demonstrated in the Boatmen's merger that we've be able to take more than we indicated."

He referred to NationsBank's purchase of St. Louis-based Boatmen's Bancshares Inc. in January for $9.76 billion.

McColl said NationsBank would take advantage of its size in Florida to reduce expenses with its vendors. "We'll be able to acquire checks, computers, telephone services for lower than other people," he said. "Large companies always have purchasing power."

The bank also plans to consolidate its support systems and redundant operations.

Regarding job cuts, McColl said reports that the bank would have to fire a substantial number of Barnett's 20,000-person staff were exaggerated.

He said natural attrition and a hiring freeze will "work on our behalf."

McColl said NationsBank plans to continue to expand in the United States and is particularly interested in California.

"The best opportunities lie west of the Mississippi River," he said.

"NationsBank would like to be in California because one out of every eight Americans live there. We remain distantly interested."

Pub Date: 9/03/97

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