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Merrill Lynch: The secret of Salt Lake City

Once branded the internet dullard, Merrill Lynch is on the offensive. More than a decade after the brokerage firm bought a bank in Utah, it’s launching a nationwide retail banking operation, based on the internet, and paying money-market rates on insured deposits. That, and its plans for a banking and investment-services joint-venture with HSBC, may take its head off the merger block. Antony Currie reports

saltlake
John Bond (left) and Dave Komansky: aiming to go on-line to serve the "mass affluent"

Listening to Dave Komansky speak was a little distracting. Each time the CEO of Merrill Lynch pronounced the initials "HSBC" it was as if Benny, a character from the old US cartoon series Top Cat had jumped into his larynx. "Okay TC" was Benny's catchphrase - laced with the accent of the Bronx where Komansky grew up - whenever he agreed, as he usually did, with his feline boss. 

But Komansky is no stooge - quite the opposite - and no cartoon character, although the trials and tribulations of Merrill over the past two years might make for a great show. Back in mid-1998 Merrill Lynch was king of the hill in investment banking, but was increasingly under pressure in retail broking - its cash cow - to respond to the rise of leading discount broker Charles Schwab. Komansky and John "Launny" Steffens - until recently head of the private-client business - had both made disparaging remarks about the role of the internet that had come back to haunt them.


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