Merger caused bookkeeping woesgreenspun.com : LUSENET : TB2K spinoff uncensored : One Thread
Caused Bookkeeping Woes
12.53 p.m. ET (1753 GMT) April 21, 2000
CHICAGO Bank One Corp. said on Friday it had some bookkeeping problems in 1999 as it integrated the computer systems of the capital markets operations of the two banks that merged to form Bank One, the nation's fourth largest bank holding company.
Bank One said the problems would have "minuscule'' impact on its financial results.
The bank would not comment on a report in Friday's Wall Street Journal that the problems have prompted an investigation by the regulatory arm of the National Association of Securities Dealers into potential violations that could result in fines of more than $1 million.
A source familiar with the investigation confirmed its existence Friday, but would not comment further.
The computer systems problems occurred when Bank One tried to integrate Banc One Capital Markets Inc. and First Chicago Capital Markets Inc. following the 1998 merger that formed Bank One.
In a statement, Bank One would not say if there was an investigation, citing company policy not to discuss regulatory matters. A spokesman for the NASD could not be reached Friday, a U.S. market holiday.
"There was no impact on customers, their security positions or their account statements,'' Bank One said in a statement. ''At year end, our books and records conformed to industry standards. The financial impact on the company will be minuscule.''
News of the investigation comes as new Bank One chief executive James Dimon tries to reform the bank's credibility with investors and analysts after problems at Bank One's credit card unit caused the company to repeatedly lower earnings guidance.
The newspaper reported that NASD is investigating areas such as account reconciliation and booking problems, security lapses and the filing of potentially misleading internal accounting reports with regulators.
Citing unnamed sources, it said disciplinary action is expected and could include fines, possibly totaling more than $1 million, against the bank and individual officers.
Bank One said on Thursday that Robert Rosholt will resign as chief financial officer, making him the first officer to leave since Dimon was named chairman and chief executive officer last month.
-- - (email@example.com), April 21, 2000
Bank One CFO Rosholt to Resign 1.13 p.m. ET (1813 GMT) April 20, 2000
CHICAGO (Reuters) - Bank One Corp. (ONE.N) said Thursday that Robert Rosholt will resign as chief financial officer, making him the first officer to leave the nation's fourth-largest bank since James Dimon was named chairman and chief executive officer last month.
Rosholt, 50, who has been chief financial officer at Bank One or one of its predecessors since 1993, will leave the company May 1, Bank One said.
Bank One shares were up 7/16 at 31-3/16 on the New York Stock Exchange in early afternoon trading.
In the past year, most of the top officers have left Bank One, including chief executive John McCoy, who retired in December amid problems with the company's credit card unit that slashed earnings and caused the stock to plummet.
McCoy had already lost much of his operational responsibilities when then-chairman Verne Istock was named president.
Analysts have speculated that Istock, who ran First Chicago NBD before it merged with Banc One Corp. to form the new Bank One, would also leave the bank once Dimon brought in his own management team.
When former Citigroup Inc. (C.N) president Dimon was named chairman and chief executive, Istock, who had been considered for the job, said he would do whatever Dimon and the board of directors wanted him to do.
The company said it has begun a search for Rosholt's replacement that will consider both internal and external.
-- - (firstname.lastname@example.org), April 21, 2000.
Bank One profits drop $460 mil.
April 19, 2000
BY JESSICA MADORE FITCH BUSINESS REPORTER
Bank One Corp.'s profit dropped by $460 million in the first quarter as problems at the bank's credit-card operations reduced earnings once again.
Chicago-based Bank One earned $689 million, or 60 cents a share, during the first quarter, down from $1.15 billion, or 96 cents, in the same quarter a year ago.
The situation was better at another LaSalle Street stalwart, Northern Trust Corp., which announced a 20 percent first-quarter earnings increase and disclosed expansion plans at its annual meeting Tuesday.
The Bank One earnings met the diminished expectations of analysts, who had projected poor performance in part on attrition at Bank One's First USA credit-card operations. Credit cards contributed $70 million to Bank One's bottom line, down $233 million or 77 percent from $303 million a year ago.
"First USA is a sick arm," said Michael Mayo, an analyst at Credit Suisse First Boston.
Bank One lost nearly 8 million credit-card customers, including inactive accounts, during the quarter at First USA.
Bank One, with $270 billion in assets, also blamed bad loans and an operating loss at Internet bank WingspanBank.com for the earnings downdraft.
Jamie Dimon, chief executive of Bank One, had little to say about the bank's performance last quarter. Dimon, hired 16 days ago at the end of the first quarter, is preparing to clean house.
"You can expect some change in the future," Dimon said during a conference call with analysts Tuesday. "We will detail those changes later."
Dimon plans to lower expenses, redesign operations and evaluate each business' overall value.
Dimon might have to turn water into wine to hit earnings targets set by Wall Street analysts, which expect Bank One to earn $2.73 a share for the year, according to First Call/Thompson Financial. The bank would have to earn an average of 71 cents a share each quarter to meet the target.
-- - (email@example.com), April 21, 2000.