Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : BANK ONE -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (398)	4/5/2000 8:59:00 PM
From: David C. Burns	Read Replies (1) \| Respond to of 466

Bank One Chief: No 1st USA Sale Now By DAVE CARPENTER CHICAGO (AP) - Bank One's new chief executive said Wednesday he's not inclined to sell the company's First USA credit-card unit or the banking company itself, despite problems that have sullied the bank's reputation. ``I came here only to build a great financial services company, not to sell it,' Jamie Dimon said in an investor conference call. He did not preclude a transaction later on, however. In remarks that should hearten customers, he also declared that customer service must be improved in all of Bank One's businesses. Dimon, named CEO and chairman of the nation's fifth largest bank holding company on March 27, has his hands full after taking a year off since departing his job as president of Citigroup Inc. Chicago-based Bank One has endured rocky times since the disclosure last August that soaring growth in First USA, the country's No. 2 credit-card issuer, had slowed due to a series of flawed marketing strategies that drove existing customers off. The mistakes carved deeply into Bank One earnings and caused its stock to lose half its value. But Bank One shares have been rallying since Dimon's hire, rising 25 percent in eight days and closing at $35.18 3/4 Wednesday on the New York Stock Exchange, a 56 1/4-cent gain. That's an encouraging sign for Bank One, whose executives have insisted for months that its operations are healthy outside the well-publicized First USA troubles and that a turnaround should be completed by year's end. It's also a whopping paper profit of $14 million for Dimon, who bought 2 million shares of Bank One stock on March 27 at $28.37 1/2 a share. While avoiding specific details of his Bank One plans in what he called an introductory call, Dimon quickly dampened speculation that he might want to shed First USA as a quick fix for the company's woes. ``The fun for me is to make this a great American financial institution, and it certainly is a great platform to do that, in spite of some of the problems and stubbed toes and broken legs we may have had lately,' he said. ``My quick read is this company's not ready to do deals right now,' Dimon said. Regarding First USA, he said ``I know what you know. I think clearly it is a serious thing, but I also look at the credit-card business as fundamentally a good business. I don't see any reason why we can't stabilize ours. ``Hopefully we'll be able to fix it.' Dimon also said Wingspan, Bank One's Internet bank unit, ``did a lot of things right' but spent too much money on bad advertising. Addressing a topic that has hurt Bank One's image, he said ``We've got to do a better job in customer service. It's just so important to the current health of the franchise.' As to his own decision to come back to a traditional banking operation rather than pursue offers to delve into an Internet business: ``I liked what I did, I like complexity, I like problems. Maybe I'm a masochist. ... I love the financial services business.'

To: Steve Fancy who wrote (398)	4/18/2000 3:20:00 PM
From: David C. Burns	Read Replies (1) \| Respond to of 466

Bank One Profits Sink 40 Percent CHICAGO (AP) - Bank One Corp. saw first-quarter earnings plummet by 40 percent as fallout from serious problems with its credit-card unit continued to erode profits at the nation's fourth-largest bank. The poor showing, however, met Wall Street's latest lowered expectations and Bank One shares rose $1.25 to $31.50 by Tuesday afternoon on the New York Stock Exchange. Net profits for the first three months of 2000 were $689 million, or 60 cents a share, down from $1.151 billion, or 96 cents a share, for the same period a year ago. A consensus of analysts surveyed by First Call/Thomson Financial, in their fourth lowered estimate since August, had forecast 60-cents per-share earnings following the bank company's warning last month of a weak quarter. Bank One blamed is weak performance on a falloff in credit-card business, more bad loans and an operating loss for its Internet-only bank WingspanBank.com. Credit-card profits sank to $70 million from $303 million, with credit quality worsening - nonperforming assets increased by $31 million to $1.19 billion. Card loans declined by 3 percent from the same period in 1999. A decline of nearly 8 million credit-card customers was recorded during the quarter by Bank One's First USA unit - the nation's second-largest issuer of credit cards behind Citibank - although the company said most resulted from a purge of inactive accounts. Slightly more than 56 million cardholders remained as of March 31. ``As expected, credit card earnings continued to be under pressure due to several factors, including margin compression, receivables attrition, lower securitization activity and higher credit costs,' the bank said in a statement. The commercial banking unit enjoyed a 47 percent increase in profits, however, in a sign the bank's operations aside from credit cards are largely healthy. Chicago-based Bank One, which has assets of more than $270 billion and branches in 14 states, was formed when Columbus, Ohio-based Banc One bought First Chicago NBD Co. in October 1998. Its problems emerged last August with the disclosure that skyrocketing growth at First USA had slowed due to a series of flawed marketing strategies that drove existing customers off and carved too deeply into profit margins. Bank One stock lost 23 percent of its value immediately and kept spiraling lower, reaching a 52-week low of $23.13 3/4 in late February. But analysts say the worst may be over and are upbeat about the March 27 hiring of former Citigroup Inc. president James Dimon as chief executive officer. Analyst Katrina Blecher of Brown Brothers Harriman & Co. said the decline in Bank One's credit-card business in the quarter was worse than she expected, with a decline in loans and still-high attrition rates. She said the company can attain its goal of completing the turnaround in its credit-card unit by year's end only ``if they can turn the revenue stream around ... and improve credit quality.' ``I'm hopeful,' Blecher said. ``But management has a monumental task in front of them. They've got a very big engine they've got to rev up.' Net-interest income for the quarter totaled $2.23 billion, down about 4 percent from $2.31 billion in the year-ago quarter. Noninterest income was $1.82 billion, down almost 30 percent from $2.59 billion. The bank did have lower non-interest expenses in the quarter of $2.66 billion, down from $2.94 billion.