Bank of America says U.S. Trust clients staying on
NEW YORK (Reuters) - Bank of America Corp. (BAC.N) said on Monday it completed its $3.3 billion purchase of the U.S. Trust business from Charles Schwab Corp. (SCHW.O), and is defying analyst concern that it would have trouble retaining many of U.S. Trust's ultra-wealthy clients.
The purchase vaults the second-largest U.S. bank into a market-leading position in managing money for the rich, with some $265 billion of private banking assets under management.
Charlotte, North Carolina-based Bank of America has tried to curb defections since it announced the purchase in November, assuring clients of no changes in service. Among other things, it decided to call the combined private banking unit U.S. Trust, Bank of America Private Wealth Management, rather than substitute its own name, as it usually does in acquisitions.
"We've seen normal attrition both on the employee side and the client side," Frances Aldrich Sevilla-Sacasa, who runs the combined unit, said in a June 29 interview. "The important thing is to focus on our ability to attract new employees and new clients." She declined to specify how many clients and employees the separate units have lost.
Many former U.S. Trust customers are in the New York City area, where their 154-year-old firm once handled money for families such as the Astors and Rockefellers. Among the firm's founders were industrialist Peter Cooper, railroad developer Erastus Corning and dry-goods merchant Marshall Field.
The combined unit will serve clients with at least $3 million of investable assets. It has nearly 134,000 clients and more than 4,800 employees, a majority of whom work directly with clients. It runs nearly 150 offices in 32 U.S. states.
Sevilla-Sacasa, 51, joined U.S. Trust in November 2005 from Citigroup Inc. (C.N).
She had been U.S. Trust's No. 2 executive until April when her boss Peter Scaturro, who was expected to run the combined private banking unit, abruptly announced his departure after reported clashes with Bank of America executives. The bank has disputed such reports.
Sevilla-Sacasa said Bank of America has hired 150 senior financial advisers since November, and U.S. Trust 50.
"We've had positive net flows, and growth in the number of clients we're serving," she said. "Both firms have continued to attract high-level, top talent, client-facing professionals."
San Francisco-based Schwab had bought U.S. Trust for $2.9 billion in May 2000, just after the end of an equities bull market. The sale will boost its focus on providing low-cost services for customers who do their own trading. Charles Schwab has said he planned to remain a U.S. Trust client.
