NEW MELLON.(Mellon Financial Corp to sell off part of business)(Brief Article)

Shedding branches is a beginning, not an end, to Mellon's restructuring

Pruning its branches will net Mellon Financial Corp. a war chest of around $2 billion in cash. Whatever it buys -- and chairman and CEO Martin McGuinn has made it clear that Mellon is shopping for fee-based businesses -- is a cue toward the venerable financial institution's transformation and, perhaps, what role it will play in the local economy.

Mellon announced July 17 that it had reached an agreement to sell its mid-Atlantic region consumer, small business and certain middle-market banking operations to Providence-based Citizens Financial Group Inc., U.S. unit of The Royal Bank of Scotland. The transaction is expected to close by the end of 2001.

Fully 85 percent of Mellon's revenue now comes from fee-based businesses.

Exiting traditional banking is part of a process, not an end in itself. After all, Mellon's best-known businesses -- …