Better Than Marriage

By local economic nationalists.

Under the eye of television cameras, the heads of three leading European banks took their places on gilded Louis XV chairs at an oblong marble table in an 18th century Baroque palace. Each man in turn signed a document. Then the trio toasted the occasion in Moet & Chandon champagne--as well they might. Credit Lyonnais of France, Commerzbank of Germany and Banco di Roma of Italy had just joined in a unique accord that one executive described as having "all the advantages of a merger without its inconveniences." The signing brought into being a financial powerhouse with $18 billion in deposits, 3,000 branches and 60,000 employees, making it the largest banking operation in Europe and the fourth largest in the world.* Though there will be no common direction, the three partners intend to "harmonize" management practices and so integrate their accounts that a customer will be able to walk into a Credit Lyonnais branch in Marseilles and make a deposit to his Banco di Roma account in Milan.

Menage `aa Trois. Bankers are the latest European businessmen to discover new virtues in mating. They are challenged both by an invasion of big, bold American banks and by the vastly larger needs of European companies that have gone multinational to meet the American competition. Disparate national laws and traditions prevent banks in one country from all-out mergers with banks of another country. But mergers in other industries have already proved projectable, and all over Europe joint ventures are the order of the day. Even parking tickets get cooperative service--one issued in Holland can be presented for collection by police in Germany. Moneymen are concluding that for them, too, partnership can pay off.

Bank combinations are taking a variety of new forms, cutting across rivalries as well as boundaries. Westdeutsche Landesbank Girozentrale, for instance, joined with National Westminster, Chase Manhattan and the Royal Bank of Canada to start "Orion." The constellation is divided into three parts: a commercial bank, a merchant bank, and a marketing wing that will steer customers of the four shareholding banks to Orion. Another new banking combine is London Multinational, which is backed by Baring Brothers, New York's Chemical Bank, Credit Suisse, and Chicago's Northern Trust. Still another grouping, called Atlantic International, brings together, among others, Banco di Napoli, National Shawmut of Boston, First Pennsylvania, United California and France's De Neuflize, Schlumberger, Mallet.

All Aboard. The multinational trend has built up a momentum of its own. Says Dr. Heinz Sippel, a Westdeutsche Landesbank representative at Orion: "There were a number of trains standing in the station, and we wanted to be sure to get aboard one of them before they all pulled out." Guido Carli, governor of the Bank of Italy, has long criticized Italian banks for lagging behind the "financial supermarkets" of the U.S., in size and range of services. By working together, Europeans will be able to provide both sufficient capital for the needs of the 1970s and the flexibility to deliver loans in any needed currency. For American banks, there is a special inducement: if they find European partners, they are less likely to be sniped at by local economic nationalists.

*After the Bank of America, First National City and Chase Manhattan.

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