ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, September 26, 1996 TAG: 9609260056
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: RICHMOND
SOURCE: Bloomberg Business News
Signet Banking Corp. stock rose 7 percent Wednesday in heavy trading on speculation that the Virginia bank could be acquired by a larger rival, traders said.
Signet shares rose $1.75 a share, closing at $27.63 on the New York Stock Exchange. More than 606,400 shares traded, almost double the daily average.
Trading in Signet stock options, which give investors the right to buy the bank's stock at a set price in the future, also was heavy, signaling that some are betting on a big surge in the bank's stock price.
Options to buy Richmond-based Signet shares for $30 a share in October, for example, rose $1 to $1.25. Some 215 contracts changed hands, nine times the daily average.
Traders cited Winston Salem, N.C.-based Wachovia Corp. as one possible buyer.
Signet spokeswoman Teri Schrettenbrunner declined to comment on merger speculation.
Signet is committed to its long-term strategy of boosting profits by relying less on branches to generate businesses and more on selling services nationwide, she said. ``It is the interest of the board and management to pursue the strategy Signet Bank has in place for long-term earnings growth,'' Schrettenbrunner said.
Signet, with $11.5 billion in assets and 250 branches in Virginia, Maryland and Washington, D.C., has gone through major changes in recent years. In late 1994, it spun off its credit card business, which pioneered nationwide marketing of credit cards as Capital One Financial Corp.
The bank is now applying the kind of nationwide marketing techniques gleaned from the credit card business, including mass mail solicitations of new customers, to other businesses such as student loans, analysts said.
Even so, the bank has suffered weak earnings this year as lending slowed. In the second quarter, profits were almost unchanged from the year-earlier period at $30.5 million, or 50 cents a share.
LENGTH: Short : 46 linesby CNB