Word: abboud
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Dates: during 1980-1989
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Conversations in the banking community last week had the strange ring of corporate slapstick: "Who's on First? Which First?" In a stunning move the board of directors of the First National Bank of Chicago fired both its abrasive chairman, Robert Abboud, 50, and its obstinate deputy chairman, Harvey Kapnick, 54, after their short but stormy tenure together and sharp earnings slumps. On the same day, First Pennsylvania Bank announced that it was to receive a mammoth $1.5 billion loan package from the Federal Deposit Insurance Corporation and 25 private banks, the largest rescue package ever put together...
...first no one minded Abboud's stormy leadership of First Chicago after he took over the nation's ninth largest bank in 1975. First Chicago had accumulated a backlog of bad loans. With what one bank official termed his "one-man-band" style, Abboud attacked the problems with decisive speed. His aggressive style was seen, for example, when he outmaneuvered the bigger Chase Manhattan Bank to secure the first loan ($8 million) by an American bank to the People's Republic of China...
Those driving personal habits, however, created problems in the staid banking community. Abboud became infamous for his humiliating chastisements of senior officials in front of their subordinates, and FORTUNE this spring named him one of the ten toughest bosses in the U.S. Some 200 bank executives left First Chicago during Abboud's tenure. One described him as "perverse, willful, abusive, inconsiderate and erratic." After one disgruntled banker resigned, Abboud said to him: "If you are leaving town, I'd like to buy your house...
...past two years, Abboud moved aggressively to get more clients with fixed-rate loans covered by short-term borrowing. Like many other bankers and economists, he figured that interest rates had peaked. When rates continued up toward 20%, his bank's profits nosedived $14 million in the first quarter. Late last year Abboud brought into the bank Harvey Kapnick, who had left the $499,000-a-year job as chairman of the Arthur Andersen accounting firm after a policy dispute with partners. It was like Frankenstein's monster meeting Dracula. Kapnick had an almost equally truculent style...