clarinews@clarinet.com (BARRY FLYNN, UPI Business Writer) (02/03/90)
BOSTON (UPI) -- The Bank of Boston Corp., battered by big losses in the region's sagging real estate market, Friday announced a major reorganization that will eliminate its real estate group as one of five independent line businesses. Instead, the region's biggest banking company said its commercial and residential mortgage real estate activities will be split and become part of other existing units. Also, the company's New England group, which includes the five banks it owns in the region, will reorganize along functional lines, the bank said. ``This new functional alignment will refine the operations ... and lays the groundwork for significant savings, improved customer service and enhanced marketing power,'' said Ira Stepanian, chairman and chief executive officer. Layoffs ``are not part of the strategy,'' said Wayne Taylor, a company spokesman. Taylor said the point of the reorganization was not to break up the real estate group but ``to have an organization that works well.'' The changes, ``effective as soon as practical,'' will reduce the five line business groups to three: New England, national and global, the company said. Also eliminated as a major operational group will be the company's treasury-banking services unit, whose components will be separated, said Taylor. Meanwhile, the executive vice president of the company's New England banking group, Clark W. Miller, will retire March 31, the bank said. He will be succeeded by Peter C. Read, 53, currently head of the treasury-banking services group, the company said. Miller, who turned 60 last week, has been with the bank 27 years. The bank emphasized Miller's retirement was the fulfillment of a personal plan he disclosed to top executives more than two years ago. Like most of the region's banks, Bank of Boston has been hurt by problems in the region's real estate market. Bank of Boston had a $125 million loss in the third quarter of last year because of bad real estate loans. For the year it earned $70 million, compared with $322 million the year before.