BankAmerica Corp., the latest and largest prosperous bank to announce sharp cutbacks, said yesterday that it would eliminate 3,700 of its 92,700 jobs and close 120 of its 1,017 branches in California.
The cost of severance, broken leases and other restructuring moves will lead BankAmerica, which is based in San Francisco, to take a $260 million pretax charge to earnings, of which $165 million will be in the fourth quarter.
The cuts reflect the first formal blueprint offered by David Coulter, who became chairman in April. Coulter, a strategic planner by background, has for now sworn off growing through acquisitions of other banks and instead undertaken a sharp-penciled review of all the bank's operations to make sure they meet high profitability targets.
"If you can control the expense side, and I think we have done that very well," he said, "you can absorb a slow revenue-growth quarter and still come out with reasonably good performance."
Much of the cost cutting has been in paring corporate staff functions -- mainly finance and human resources -- that will account for 40 percent of the job reductions. Coulter has also sold underperforming operations, including branches in Texas, part of a bank in Korea and a subsidiary in Hong Kong.
Analysts cautiously praised the moves but noted that the cuts were far less drastic than announced by other banks. For example, last month KeyCorp said it would close or sell 23 percent of its branches and eliminate 10 percent of its jobs.
"This is fine tuning," Carole S. Berger, an analyst with Salomon Brothers, said. "The cuts are meaningful, but I would not call them dramatic."
Pub Date: 12/13/96