Glitches Snarl Crestar Switch To SunTrust By Dana Hedgpeth Washington Post Staff Writer Friday, June 2, 2000; Page E01

Changing the signs on Crestar Bank branches to SunTrust is proving easier than actually changing the customers over.

Atlanta-based SunTrust Banks Inc. is in the midst of converting 2 million Crestar customers to its system. The company had hoped to complete the switch over the long Memorial Day weekend, but massive glitches have arisen.

Since Tuesday, an undetermined number of customers have reported problems gaining access to their money using automated teller machines. Some customers have not been able to obtain updated account information. The company's online banking system, which thousands of customers use to pay bills, has been unavailable to Crestar customers. Affected customers were not able to use ATMs operated by other banks either.

The most common problem has been the rejection of customers' personal identification numbers at cash machines, said SunTrust spokesman Barry Koling in Richmond. Koling attributed all the problems to mix-ups in the change-over of Crestar's back-office systems.

"There have been computer glitches in that undertaking," Koling said. "There was a disruption in the connections between the branch computers and the mainframe. That interrupted the availability to account information."

Koling said half of the computers were online yesterday and the rest should be operational by today. "We're working around the clock to resolve these issues," he said.

The call volume for questions has doubled since Tuesday. Crestar has 370 branches in Virginia, Maryland and the District, which will give SunTrust about 1,100 locations.

Crestar has about 100,000 Internet banking customers. Of those, about 8,500 pay bills online.

May 30 was Crestar's first full day of operation as SunTrust, which bought Crestar in 1998 for $8.1 billion, creating the 10th-biggest U.S. bank company. It was the last in a line of big mergers that have remade the local banking landscape in recent years, and caused customers varying degrees of disruption.

SunTrust had at first proposed operating Crestar separately and allowing it to keep its identity, in keeping with SunTrust's community banking strategy. And at the time of the deal, Crestar officials promised that there would be no change in customer service or any service disruptions.

But SunTrust decided last year to merge its 27 separate banks across the Southeast into one bank. That regulatory change occurred in early January, paving the way for SunTrust to begin actually merging the banks' operations and back office systems. The move was designed to save money.

SunTrust, however, maintains a regional management structure, with local executives making loan decisions.

SunTrust in its annual report said that merger-related charges in 2000 will come to $42.5 million. The company said the costs relate to systems conversions and business-line integration of Crestar. SunTrust recorded $45.6 million in pretax merger-related charges last year.

) 2000 The Washington Post Company

http://www.washingtonpost.com/wp-dyn/articles/A48883-2000Jun2.html

-- Martin Thompson (mthom1927@aol.com), June 03, 2000