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Union Bank of California's parent company plans to deploy excess capital including savings from a 14-month cost-cutting program - throughout the secondlargest California-based bank.
A final version of the plan, the company's first in-depth strategic look at its products and services, will be presented Nov. 4 to UnionBanCal Corp.'s board of directors.
Bank leaders are mum on details of the initiative. But sources said the project could underscore the San Francisco company's desire to buy another institution, as well as spell out plans to beef up its branch network and mutual fund business.
"We went through every major business in the company," said Vice Chairman Richard Hartnack, "and we're at a point that we can say, is this an invest-and-grow business? Is this an invest moderately to keep with the market business? Is this a cash cow? Or is this a divest business?
"It's about as clean-sheet an exercise as I've ever been through," he said.
The McKinsey Project
Ignited by a study from the consulting firm McKinsey & Co., the so-called "McKinsey Project" follows on the heels of Union's "Mission Excel" cost-cutting program and as the bank tries to trim its wobbly loan portfolio.
Mission Excel, a nearly finished effort to shear off 7 cents of expenses for every dollar of revenue, is labeled a success by analysts. But employees,...