So what else is new? Analysts have been making roughly the same forecast for several years, and although there have been plenty of mergers among area banks - the quarterly ratings list at the end of this article is 7 percent shorter than when it first appeared in 1992 - the roster of really big
financial players in town hasn't changed much since about 1990, when First Pennsylvania and Fidelity Bank ceased to be independent companies.
The year 1995, however, is likely to present some special challenges as well as opportunities for banks, observers said.
In the latter category are the rapidly falling legal and regulatory
barriers to what banks can do and where. Congress opened the door last year to interstate branching, giving banks the long-sought power to operate branches freely across state lines. And just last week, the Supreme Court said banks could have a freer hand in the sale of annuities, an increasingly popular investment that insurance companies have historically considered part of their turf.
The high court's ruling is "a significant milestone" for banks, Furash said, putting them "further on the road to becoming financial-service companies."
Banks and insurance companies believe that sales of annuities will soar as more baby-boomers begin to plan their retirement. Annuities, essentially agreements to receive income later in exchange for payments upfront, can be a sensible way to turn a lump sum, such as an inheritance or pension payout, into a monthly or yearly cash flow.
Although most annuities have an insurance component, inserted to make them eligible for preferential tax treatment, the Supreme Court ruled that they really are investments and may therefore legally be sold by banks.
The court overruled objections by insurance agents, who fear that banks will make it easier and more attractive for people to buy annuities where they already keep much of their savings.
