Despite widespread dissatisfaction among customers of large banks, L.A.’s homegrown institutions have failed to capitalize on the opportunity to grab new customers.
A new study of L.A.-area banks found that while satisfaction rates were higher among customers of small institutions, more than 60 percent of the people surveyed said they would not consider banking with local community or regional banks.
David Ascher, managing partner of Century City’s Transom Consulting Group, which conducted the survey, said local institutions have mostly failed to change the widely held misperception that community banks, which have fewer ATMs and branches, are less convenient.
He noted, for instance, that many small banks will waive fees associated with using other institutions’ ATMs, but few know that. As a result, the banks failed to benefit from the financial crisis of the last several years.
“They have not capitalized,” Ascher said. “The financial crisis has not helped the perception of community and regional banks, even though it probably should.”
One of the biggest problems, he said, is that the local banks have not done enough to differentiate themselves from one another, resulting in a “sea of sameness” in the community bank sector.
Only City National Bank, the largest bank headquartered in Los Angeles County, was recognized by more than half of the general public, according to the survey. Fifty-one percent of respondents had heard of the bank, while 58 percent of the affluent respondents knew of it.
OneWest Bank, the largest savings and loan in the county, was the second most widely known, despite being a relatively new institution. The Pasadena thrift, created in early 2009 from the assets of failed IndyMac Bank, was recognized by 35 percent of the general public and 40 percent of wealthy respondents.
OneWest recently unveiled an ambitious marketing plan that includes billboards and television advertisements.
“They’ve pursued an expensive way to drive awareness,” Ascher said. “They’re likely to get some return on that investment, (but) not every bank will be in a position to spend their way out.”
Ethnic banks, including L.A.’s rich collection of Chinese-American and Korean-America institutions, have an advantage in customer acquisition in their own communities, he said, but have difficulty appealing to mainstream depositors.
Bearish Bet
The bears have been eyeing beleaguered CVB Financial Corp., but the company is fighting back.
The Ontario holding company for Citizens Business Bank saw an abnormally large number of put options to sell its stock – a sign that traders anticipate a significant price drop – leading up to last week’s earnings report. Puts, which give the acquirer the right to sell stock at a specified price, can insure against large losses when a share price declines.
But CVB surprised those pessimistic investors with a fairly strong report, earning an $18 million profit on just a slight uptick in problem loans.
Shares, which had fallen 25 percent since CVB announced Aug. 10 that it received a subpoena from the Securities and Exchange Commission over its loan loss accounting, rose slightly after the earnings announcement.
Bringing on Bankers
Bank of America Corp. is planning to bulk up its small-business banking in Los Angeles.
The financial giant said it will hire more than 1,000 small-business specialists by early 2012 as part of a push to help companies with revenue under $3 million. The new hires will be located in branches in the L.A.; Dallas; and Washington, D.C., markets.
The bank was a beneficiary of the federal bailout and has been under pressure to step up lending. It said the initiative was developed in response to customer requests.
Through the first six months of the year, the bank provided more than $45 billion in credit to small businesses.
The push comes just weeks after the bank announced it will begin placing financial advisers, mortgage specialists and small-business consultants in select branches under a pilot program designed to capitalize on its expanded capabilities after recent acquisitions.
C-Suite News
Accounting giant Deloitte LLP announced that Michelle Kerrick was named office managing partner overseeing the firm’s L.A. practice. … NUA Advisors LLC, an investment advisory firm in Portland, Me., specializing in nontraditional retirement investments, announced that it has hired George Zuluaga to run its newly established Lakewood office. … Jefferies Group Inc., a global investment banking and securities firm, announced that William Newby has been hired as a managing director in its L.A. office. … Houlihan Lokey, an investment banking firm headquartered in Los Angeles, announced that Jake Foley was hired as a managing director.
Staff reporter Richard Clough can be reached at [email protected] or at (323) 549-5225, ext. 251.
