Fox News Exclusive: Banking Behemoth

This is a partial transcript from "Your World with Neil Cavuto," June 21, 2004, that was edited for clarity.

NEIL CAVUTO, HOST: It’s a deal that will create the largest bank in the Southeast, one of the largest in the world. And it’s all the talk here in the Southeast, an exclusive interview with the man who will run that bank.

Wachovia is snapping up Alabama-based SouthTrust in a $14.3 billion deal. It will create a banking behemoth with more than 3400 branches, $464 billion in total assets and growing. The deal will help Wachovia compete with Bank of America by boosting its presence in states like Florida, Texas and here in Georgia. Shares of SouthTrust were jumping 14 percent on the news. Wachovia as the acquirer dropping 3 percent In an interview you can only be seeing here on FOX, Ken Thompson, the president, the chairman, CEO of Wachovia.

Mr. Thompson, a pleasure, welcome.

KEN THOMPSON, CHMN., PRES., & CEO, WACHOVIA (WB): Thank you, Neil, it’s good to be here.

CAVUTO: Well, congratulations. I think you have got a pretty big bank here to swallow, are you up to it?

THOMPSON: Well, we are thrilled and we are ready for it. SouthTrust is one of the premier banking organizations in the country. It has got a 12 percent growth rate over the last decade. It has got a great management team. It is a very clean bank, a very low-risk bank. I think their charge operation has been the lowest in the industry over the decade. And so it is a big deal. But is one that we think is a low-risk deal for both sets of shareholders.

CAVUTO: Let me ask you about people who work at the bank, the combined entity, better than 4000 jobs will likely be lost, when and over what time?

THOMPSON: Well, that will be over about an 18-month period, which is what we believe it will take to in great the two banks. We’ll have about 4300 jobs that will go away but about 25 to 35 percent of those jobs will simply be through attrition. So we think over the 18-month period there will be very few people that will actually lose their jobs, and obviously, we will do that with significant severance packages and we will treat employees who do not have a job with certainly a great deal of respect.

CAVUTO: Mr. Thompson let me ask you about this phenomenon, it is nothing new to Americans, a lot of banks are combining very, very quickly. What do you think this country is going to look like in 10 years? Is it going to be like Germany, maybe five or six big banks and that’s it? What do you see happening?

THOMPSON: Well, I think there will still be a lot of banks in the country 10 years from now but there will be, yes, I agree, a handful of large financial institutions, they won’t be just banks, they will be big financial services companies. And then there will be, I think, thousands of very small banks. I don’t think there will be a lot of banks in the middle. So I think probably 10 or 12 very large financial institutions and a lot of smaller ones.

CAVUTO: All right, now you’ll certainly be a key player at the table. Every time I think you are done digesting banks you digest some more. And you are a pretty thin guy, so I don’t know how you are pulling that off. But what happens now? Where do you go from here?

THOMPSON: Well, we will focus over the next 18 months in making sure that the merger integration with SouthTrust is done flawlessly. When we did the First Union-Wachovia merger, we took two year and we actually improved customer service scores and customer attrition went down during the merger integration process and we want to do the same thing this time. So we will be tending to our knitting over the next 18 months to make sure our customers are not disrupted by this merger.

CAVUTO: Now you got the announcement out of the way before Alan Greenspan and his buddies on the Fed presumably start hiking interest rates in a week or so. What do you think of that? And are you worried about that?

THOMPSON: I think it is actually a good thing. It says the economy is improving and we are seeing that. Our company is asset-sensitive right now so we are expecting higher rates. SouthTrust is also an asset- sensitive company. Both of us are good consumer lenders, good small business lenders and commercial lenders and so rising interest rates connotes more loan demand and we’ll benefit from that.

CAVUTO: All right. Are you in the camp that says Alan Greenspan is a god?

THOMPSON: Well, I don’t know that he is a god but I think he’s done a great job over the last four administrations.

CAVUTO: So you don’t see any alternative to him when he has to step down presumably in a couple of years?

THOMPSON: Well, you know, nobody is indispensable. But I’m glad he’s around.

CAVUTO: All right, Ken Thompson again, congratulations on this, until the next merger, very good having you. Wachovia chairman, the president, CEO, Ken Thompson joining us on this big deal.

THOMPSON: Thank you, Neil.

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