NationsBank Corp. has decided the fate of two divisions of MNC Financial Inc. that either conflict or compete with the Charlotte, N.C., company's business: One will go and one will stay.
The stock transfer operations of MNC, which employ more than 60 people in Baltimore, will be sold to Chemical Banking Corp. of New York. The deal was decided late last week in preparation for MNC's merger with NationsBank.
The sale is planned to occur after the merger of NationsBank and Baltimore-based MNC goes through, which is expected in September. A contract has not been signed, and the sale price was not disclosed.
The decision was made because of a five-year "noncompete" clause for stock transfer operations that NationsBank negotiated last year when it sold its own stock transfer business to Chemical.
Stock transfer units handle stockholder relations duties for corporate clients, including issuing and registering stock certificates, paying dividends and keeping records.
Also, NationsBank announced yesterday that it will allow ASB Capital Management Inc., a Washington-based investment advisory firm owned by MNC, to keep its name and operate as an independent unit of the parent company.
ASB Capital Management employs 63 people, all but one in its Washington office. One portfolio manager works in Baltimore, serving clients of the former Equitable Bank, which MNC acquired in 1989.
NationsBank said it decided to keep ASB independent because of its success during the past decade. The unit has $11.1 billion in assets under management.
Spokesmen for MNC and Chemical could not say how many of the stock transfer unit's employees will be offered jobs at Chemical, how many will remain at MNC and how many will lose their jobs.
"We are committed to a maximum effort to try to place all of those people elsewhere in the company," said MNC spokesman Daniel Finney.
The unit, part of MNC's Security Trust division, handles stock transfer operations for about 125 corporate clients, according to Mr. Finney. He said Security Trust representatives will be calling stock transfer clients individually with the news during the next few days.
Before it sold its unit to Chemical, NationsBank had the ninth-largest such operation in the country, with about 340 clients and 575,000 shareholder accounts, according to Chemical spokesman Ken Herz. Chemical has the largest stock transfer business in the nation with more than 6 million shareholder accounts, and has offices in New York, Dallas, Los Angeles and San Francisco.
In a related area, the Federal Reserve Board yesterday permitted a NationsBank unit, NationsBanc Capital Markets, to underwrite debt and equity securities on a limited basis, and to provide services regarding foreign exchange activity.
The unit will initially underwrite debt securities and doesn't intend to deal in equities for at least a year, the Fed said in its order.