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NATIONSBANK CEO OUTLINES COMPANY'S SUPPORT FOR INTERSTATE BANKING BEFORE U.S. HOUSE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS

 NATIONSBANK CEO OUTLINES COMPANY'S SUPPORT FOR INTERSTATE BANKING
 BEFORE U.S. HOUSE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS
 WASHINGTON, June 25 /PRNewswire/ -- NationsBank Corp. (NYSE: NB) Chief Executive Hugh L. McColl Jr. today reinforced the merits of legislation that would result in a more efficient, better-capitalized banking industry.
 McColl outlined the company's support for H.R. 4170 (Interstate Banking Efficiency Act of 1992) in testimony to the Subcommittee on Financial Institutions of the Committee on Banking, Finance and Urban Affairs of the United States House of Representatives.
 "With the mounting costs of bank regulation and increased burdens of FDIC insurance, it stands to reason that banks must be allowed to operate as efficiently as possible," McColl said. "Yet, the geographic barriers placed on our industry have produced exactly the opposite effect."
 Banking is the only major U.S. industry so tightly restricted by the artificial, geopolitical barriers of state boundaries, he said. He then applied those barriers to another industry vital to the nation's economic well-being -- the automobile industry.
 "If we really want to cripple the U.S. automobile industry, why don't we require GM, Ford and Chrysler to set up separate subsidiaries in each state. That would mean 50 CEOs, 50 separate reporting systems, 50 different audits," McColl said.
 "And, of course, we would require each subsidiary to be examined separately by state and federal government agencies exclusively set up for that purpose. Absurd? Of course it is. But it is no more absurd than the way our nation's banking system is required to operate."
 Consolidation, McColl said, would result in enormous savings to the banking industry. McKinsey & Company's Lowell Bryan estimates that consolidation could save the U.S. banking industry at least $10 billion annually. McColl compared those potential savings to 1991 pre-tax income for the entire industry of less than $20 billion.
 "The immediate first-year savings from interstate branching for NationsBank would provide us the capital to grant over $400 million in new loans each year across our franchise," McColl said. "For our industry, the savings from interstate branching would fund literally billions of dollars in new loans annually."
 That, he said, is in the best interest of local communities. "Some believe that banks not headquartered in a local community are not as responsive to community needs," McColl said. "In fact, an examination of bank data provided by banks to regulators shows that interstate institutions have a higher concentration of loans than community banks.
 "Multi-state banks loan 84 cents of every dollar they have on deposit, compared to 67 cents for our nation's 10,000-plus community banks. In fact, these multi-state banks now provide virtually two-thirds of all dollars loaned by U.S. banks," McColl said.
 "Interstate branching also would result in many benefits to the consumer," McColl said.
 "In terms of convenience, interstate branching will allow bank customers to have access to all bank services at any branch regardless of where they live, work or travel," he said. "And," he added, "few other developments in banking will go as far to make banking more convenient or price-competitive as interstate banking and branching."
 Congress should grant all U.S. banks the opportunity to expand across markets and diversify their risk, McColl said.
 "Interstate branching will permit banking companies to benefit from multiple markets and products," he said. "NationsBank has already proved the value of geographic and product diversity with the balance it has achieved through its operations in the regional economies throughout our ten-state territory."
 Passage of H.R. 4170 would result in a stronger, more competitive banking industry, McColl said. "Clearly, this would enable the industry to better serve customers, communities and shareholders."
 NationsBank is the country's fourth largest bank holding company with $113 billion in assets and full-service offices in nine states and the District of Columbia.
 -0- 6/25/92
 /CONTACT: Ginny Mackin, Corporate Communications, NationsBank Corporation, 704-386-5501/
 (NB) CO: NationsBank Corporation ST: North Carolina IN: FIN SU:


CM -- CH002 -- 3706 06/25/92 11:03 EDT
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Date:Jun 25, 1992
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