| Merger
glitches hit banks bottom line |
Wells
Fargo & Co.'s renowned stagecoach hit a pothole in its ambitious
merger with
First interstate Bank.
|
| On
July 15, the nations ninth largest bank stunned Wall Street analysts
when it announced A $150 million write off to cover lost or misplaced
deposits, which led to a 37% drop in earnings for it's second quarter
financial results. Wells Fargo executives described the deposit
debacle as a paper based problem because the bank had trouble reconciling
First Interstate customer account numbers with its own. |
|
However, analysts said those problems were exacerbated by differences
between Wells Fargo general ledger system and those used to support
First Interstate’s 10 state network. Under its aggressive merger
plans, Wells Fargo tried to consolidate systems that supported 975
First Interstate branches with its own within 8 months. But Wells
Fargo failed to bring its general-ledger systems together fast enough
to identify and reconcile the First Interstate deposits lost in
the shuffle. [CW, Sept. 30, 1996].
|
|
...Said Ronald I Mandle, a banking analyst at Sanford C. Bernstein
& Co. in New York, 'Check processing is Banking 101. This is a problem
that can be solved." |
