THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, October 18, 1996 TAG: 9610180510
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: 54 lines
Hoping to cut costs and expand its pursuit of new consumers, Signet Banking Corp. said Thursday it plans to overhaul the way it sells loans, investment products and other financial services.
Some jobs are likely to be eliminated as part of the effort to improve efficiency at Signet, which is the second-largest banking company based in Virginia. So, the company has imposed an immediate freeze on hiring.
Signet has 4,200 full-time employees and 955 part-time employees. In Hampton Roads, it has 270 employees.
Signet, whose earning performance has been checkered in recent years, said the restructuring effort will emphasize greater use of mail, telephone and computers for delivering its services.
The company has a network of 250 branches, including 27 in Hampton Roads. It has not decided how its branches will fit into the new scheme or which lines of business might be expanded or dropped, said Teri Schrettenbrunner, a spokeswoman for the Richmond-based company.
``We have made no targets and no goals at this point,'' she said. ``There are no sacred cows.''
The overhaul will begin with a seven-month review and take another year to 18 months to put in place, Signet said. To help with the process, Signet has hired a consulting firm, Aston Associates.
For the quarter ended Sept. 30, Signet reported net income of $29.61 million, which was down from $30.14 million for the comparable three months last year.
Per-share earnings were 49 cents, compared with 50 cents for the 1995 third quarter.
Signet's largest source of earnings, net interest income, edged up 1 percent in the recent quarter to $118.43 million, while income from fees and other non-interest sources rose 45 percent to $68.13 million.
But results for the recent quarter were hurt by a $19 million provision for loan losses, which was more than twice the $8.68 million set aside for loan losses in last year's third quarter.
For the past two years, Signet has been expanding the use of computerized market analysis that made its credit-card operation highly profitable. However, its loan-by-mail activity was hurt earlier this year by a rise in troubled loans, and Signet said it delayed some of its marketing for this program.
Signet also reported that its non-interest expenses for the third quarter rose 12 percent from the year-earlier period.
For the nine months, net income fell 11 percent to $91 million from $102 million for the comparable period last year. Per-share earnings were $1.51, down from $1.71.
On Thursday, the price of Signet's shares closed at $26.62, down 38 cents for the day. by CNB