ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Tuesday, January 21, 1997 TAG: 9701210095
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
DATELINE: COLUMBUS, OHIO
SOURCE: Associated Press
The deal would create the nation's third-largest credit card operation with a combined 32 million cardholders, marrying the nation's 10th largest bank with one of the nation's fastest-growing credit card companies.
If the deal is completed, Columbus-based Banc One would trail only Citicorp and AT&T Corp. in the number of credit cards issued. First USA offers both Visa cards and Mastercards.
The combined operation would have assets of $35 billion, though Dallas-based First USA is expected to continue operating under its current name.
Officials did not expect layoffs to result.
``First USA will add a powerful new dimension to our competitive arsenal and significantly change the way Banc One can compete in the consumer financial services business,'' John McCoy, Banc One's chairman and chief executive, said in a statement.
He said specialized card issuers have developed economies of scale over the last decade. ``First USA is well-known for its low-cost structure, its marketing savvy and its cutting-edge technology.''
McCoy foreshadowed the deal in a 1993 letter to shareholders in the company's annual report that cited the growing influence of non-banking corporations, most notably AT&T, GM and Shell Oil, in the credit card business.
``This activity will continue to drive small bank card programs out of the market, and Banc One will continue to have an opportunity to look at a range of possible portfolio acquisitions during the next few years,'' he wrote.
On Monday, McCoy said Banc One is interested in further acquisitions. ``We want to be a national banking company,'' he said.
Stock analyst Lawrence Vitale said the deal is a good one.
``They're buying growth,'' he said. ``They saw the independents run away with the business, and they're trying to catch up.''
Vitale, who covers Banc One for Bear Stearns & Co. in New York, said Banc One was showing healthy growth in its credit card business, but First USA reported even faster growth and had lower losses from delinquencies.
LENGTH: Short : 50 linesby CNB