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Bank One sells loan biz
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March 22, 2000: 3:16 p.m. ET
Household nabs $2.15B real estate loan slate of Bank One consumer finance unit
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NEW YORK (CNNfn) - The consumer finance unit of Bank One Corp., the Chicago-based banking giant, agreed on Wednesday to sell its $2.15 billion real estate loan portfolio and transfer roughly 900 employees to the consumer finance company Household International Inc. for an undisclosed sum.
The sale of the loan portfolio of Banc One Financial Services, which has operations across 29 states, is expected to bulk up the core business of Household International (HI: Research, Estimates), the nation's third-largest consumer finance company, while allowing Bank One to concentrate on its primary operations. The transaction is expected to close on March 31.
"This customer base is consistent with our focus on the middle market and the office network will nicely complement our existing 1,400 branches," said William Aldinger, Household International chairman and CEO, in a statement.
Household said the purchase would add to its earnings upon closing.
About 900 of Banc One Financial Services' 1,100 employees will be offered jobs at Household, the companies said. Some will stay on at Bank One.
Shares of Bank One (ONE: Research, Estimates), the nation's fifth-largest bank holding company and No. 2 issuer of credit cards, edged down 1/4 to 26-7/8 just before 3 p.m. ET on the New York Stock Exchange. Household International, of Prospect Heights, Ill., fell 13/16 to 37-1/16.
Bank One revamping
Times on Wall Street have been tough for many top banks recently, mainly as a result of climbing interest rates that cut into profit margins. For its part, Bank One earlier this year warned its earnings for 2000 would come up short of analysts' forecasts as it works to right its First USA credit card division - one of three earnings warnings at the bank over the last year.
"This sale reaffirms our corporate strategy to focus more sharply on our core businesses and markets where we can leverage our scale and skill," Verne Istock, Bank One president and acting chief executive officer, said. "We will continue to grow our home-equity and mortgage businesses by focusing on households in our footprint states, where the Bank One brand is well-known."
Bank One has also been struggling to squeeze profits out of its Internet banking unit WingspanBank.com, which was launched last year to much hoopla. The company declined to comment on a Wall Street Journal report Wednesday that the Internet unit is on the selling block.
"We're looking at all of our strategic options across all lines of business and that includes Wingspan," Thomas Kelly, a spokesman for Bank One, said in response to an inquiry about the report. The Journal said Bank One has hired Morgan Stanley Dean Witter to explore a possible sale of Wingspan
John McCoy, who championed the credit card unit and the push onto the Internet, retired as Bank One chairman and chief executive at the end of 1999. There were several other departures of top executives late last year. 
-- from staff and wire reports
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