
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, July 13, 1995                   TAG: 9507140022
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Bloomberg Business News
DATELINE: CHICAGO                                LENGTH: Medium

CHICAGO, DETROIT BANKS MERGE TO BECOME NO. 7

First Chicago Corp. and NBD Bancorp Inc. of Detroit agreed Wednesday to merge, creating the nation's seventh-biggest bank with a leading stake in the Midwest and a market value of $10.6 billion.

For First Chicago, the move averts an outright takeover, hooks it up with a more profitable retail bank and keeps alive the venerable First National Bank of Chicago name, which dates to 1863.

For NBD, the merger lets it enter new retail and corporate markets, gives it a huge and profitable credit-card business and helps it shed its image as Michigan's ``Nice But Dull'' bank.

``This really establishes a powerhouse that will dominate the Big 10 region of the country,'' said George Salem, analyst with Gerard Klauer Mattison & Co., referring to the Midwest college sports league.

The agreement comes amid a flurry of acquisitions as U.S. banks jockey to gain business in the most populous and wealthiest areas of the country.

Monday, PNC Bank Corp. of Pittsburgh said it will buy Midlantic Corp. of Edison, N.J. Three weeks earlier, First Union Corp. of Charlotte, N.C., agreed to buy First Fidelity Bancorp. of Lawrenceville, N.J.

The merger with First Chicago ``is part of the continuing consolidation of the financial-services industry,'' said NBD Chairman and Chief Executive Verne Istock. First Chicago shares fell 87 1/2 cents a share to $61.50, while NBD shares rose $1.871/2 to $34..37 1/2.

The combined company, with $120.1 billion in assets, will have the largest share of the banking markets in Illinois, Indiana and Michigan.

First Chicago is the nation's No.10 banking company with $72.4 billion in assets; NBD Bancorp is No.18 with $47.8 billion in assets.

The new bank will be a shade smaller than Chase Manhattan Corp., the sixth-largest U.S. bank. It also will be larger than its biggest regional rivals, Ohio-based Banc One Corp. of Columbus and KeyCorp of Cleveland.

The transaction will make First Chicago too big to be easily acquired by other banks interested in the company's No.1 share of the Midwest's corporate banking business or its credit card business, the fourth-largest in the nation.

by CNB