LaSalle attracts new suitor
Parent firm ABN Amro at center of takeover fight
http://www.chicagotribune.com/busine...,6424523.story
By Becky Yerak
Tribune staff reporter
Published April 26, 2007
It was a modest purchase by Royal Bank of Scotland Group PLC standards.
In February, seeking to beef up its Chicago presence, RBS' U.S. business paid about $180 million for Lisle-based GreatBanc Inc., a bank holding company with 10 Chicago-area branches. Soon after, 40 percent of GreatBanc workers were told they were getting pink slips, and plans got under way to retire the GreatBanc name in favor of Charter One, one of RBS' two key U.S. brands.
Could the same scenario repeat itself at LaSalle Bank if RBS bags the city's No. 2 bank?
LaSalle, which early this week appeared on the verge of being bought by Charlotte-based Bank of America Corp., now has RBS as a suitor as well.
On Wednesday RBS teamed with two other European banks to bid $98.5 billion for LaSalle's Dutch parent, ABN Amro Holding NV, in what's shaping up as the financial-services industry's biggest takeover battle. Their offer tops a joint deal announced Monday that had Barclays PLC buying ABN, and Bank of America stepping in to take LaSalle for $21 billion.
RBS already has a significant U.S. presence through its Providence, R.I.-based Citizens Financial Group, which does business primarily under two names: Citizens Bank and Charter One. The unit has more than 1,600 offices and more than 26,000 employees in 13 states, covering New England, the Mid-Atlantic and the Midwest.
With about 130 Chicago-area branches, Charter One had Chicago-area market share of 2.8 percent as of June 30, 2006, according to the latest figures available from the Federal Deposit Insurance Corp.
Combined with LaSalle, which has about 140 Chicago-area branches, Charter One would have market share of 16.9 percent, surpassing market leader JPMorgan Chase.
The deal would give Charter One a stronger presence in mid-market commercial lending, a LaSalle strength in its key markets of Chicago and Detroit. LaSalle operates 260 branches in Indiana and Michigan.
Banking industry observers expect Charter One, like Bank of America, to cut LaSalle jobs. Bank of America has said LaSalle's name would be dropped in favor of its brand, which has more national sweep, but the moniker's chances of survival might be slightly better under Charter One ownership.
That is because it was only three years ago that RBS bought Charter One, which at the time was headquartered in Cleveland. Meanwhile, the LaSalle name has a 67-year history in Chicago.
Charter One representatives referred calls to Citizens, which declined to comment on the future of the LaSalle name or workers.
But a Citizens spokeswoman on Wednesday confirmed that Charter One is in the process of changing the name of GreatBanc branches to Charter One. That deal expands Charter One's presence in Chicago, Skokie and Evanston and provides entry into the towns of Olympia Fields, Chicago Heights, Frankfort, Cary and Algonquin.
When that deal closed in February, Charter One announced it would lay off 100 of GreatBanc's 250 workers in May, according to a published report. It said it would not retain GreatBanc's back-office jobs and would close its former Lisle headquarters.
As for the future of the LaSalle name, one banking industry observer doesn't think there's room for both LaSalle and Charter One in Chicago.
"I don't know if they want to compete against themselves, with two names in a market," said George Morvis, chief executive of Financial Shares Corp., a Hinsdale-based marketing consulting firm. "I'd say in Chicago it should be one name, and I'm not sure which name, but my guess would be Charter One because they are the buyer."
Regardless of what happens to the LaSalle name under Bank of America or Charter One, "whoever acquires LaSalle is going to get out their liposuction machine and cut out the fat," Morvis said.
LaSalle is well known for its support of Chicago's art community, as well as its sponsorship of the Chicago Marathon.
In its annual report, Citizens highlighted one of its key Illinois charity initiatives as "Making Music Matter," which supports local not-for-profit groups by raising money at summer concerts.
Charter One also has partnered with the Greater Chicago Food Depository to distribute donated food throughout a network of 600 Illinois pantries, soup kitchens and shelters. It also provided funding for 3,000 additional boxes of food.