BANKAMERICA CUTTING BACK : COMPANY TO CUT 120 STATE SITES, 1,100 JOBS.

Byline: Dave McNary Daily News Staff Writer

BankAmerica Corp. announced Thursday that it will close 120 of its 1,020 California branches and add 50 supermarket offices to the 400 it operates in the state, reflecting the move away from branch banking to electronic transactions.

The closures will result in the loss of about 1,100 jobs, though officials did not indicate how many will come through layoffs, retirements or transfers. Last month, the bank announced 30 branch closures, including local offices in Granada Hills, North Hills and Littlerock.

Ninety other branches - as yet unspecified - will be shut next year.

The San Francisco-based bank will cut an additional 2,600 of its 92,700 jobs by reducing staff in corporate banking and support services, including previously announced cuts at operations in London and Tokyo. The nation's third-largest bank will take a $165 million fourth-quarter after-tax charge to cover the costs of the plan.

BankAmerica stock fell 3-1/8 to close at 94-1/8 on the New York Stock Exchange.

A spokesman said additional cuts could come through an ongoing review of its national operations, including closing more of the 1,400 branches in 10 states. The nation's third-largest bank also operates 750 in-store branches systemwide and plans to add 200 more of those locations, many in Lucky Stores supermarkets.

Barry Rubens, president of Santa Monica-based industry tracker California Research Corp., said the decision to cut back on the traditional branches in California makes sense. ``They have multiple locations in some areas, so it's a smart move,'' he said. ``Generally speaking, Bank of America has wonderful coverage in California.''

Rubens also said the bank's decision to expand its supermarket presence should pay off over the next five years.

``As people get used to electronic banking, the branches will become less and less important,'' he said. ``Once they get out of the habit of going to branches, banks won't have as much need for bricks and mortar.''

David Coulter, who became BankAmerica's chairman and chief executive officer in January, said the changes are part of a strategy to use its resources more effectively and operate more efficiently.

``With retail customers now performing 70 percent of traditional branch transactions outside of a branch, we will be constantly adjusting the way we provide these services,'' Coulter said.

Coulter also announced plans to develop a sales force of about 1,400 to sell a variety of banking products through the branches.

Analysts had been expecting BankAmerica to make cost-cutting moves and invest in existing operations rather than make acquisitions such as those by Chase Manhattan Corp. and NationsBank Corp. California rival Wells Fargo & Co. bought First Interstate Bancorp in April for $13 billion in the nation's most expensive bank deal.

Wells Fargo currently operates more than 600 branches and nearly 500 in-store branches in California while its 10-state system has nearly 1,300 branches and over 540 in-store locations. Earlier this year, it announced a partnership with the Thrifty PayLess drugstore chain to open store outlets within branches, but no definite locations have been set, partly because Thrifty Payless is being acquired by Rite Aid.

BankAmerica's $165 million charge will have a pretax cost of $280 million, including $100 million for the costs of the 120 branch closures in California, $130 million for the cutbacks in corporate banking and $50 million for staff support reductions, particularly in finance, mail processing and human resources.

BankAmerica, which has $242 billion in assets, has not made a major acquisition since buying Security Pacific Corp. for $4.8 billion and Chicago's Continental Bank Corp. for $1.7 billion several years ago.

``Eliminating positions is always difficult,'' Coulter said. ``However, we have learned that it is better to take such action when the company is performing well.''

Since becoming CEO, Coulter has concentrated on cutting costs and ending operations that fail to bring adequate returns. In the past 12 months, the bank's stock price had risen 45 percent until Thursday's decline.