Niche Accent Profile: Manufacturers Bank

0

MANUFACTURERS BANK

Downtown Los Angeles

FOUNDED: 1962

CEO: Mitsugu Serizawa

FOCUS: Japanese-American and other Asian-American communities

L.A. COUNTY BRANCHES: 7 (Eighth branch opening in January)

From its beginning exactly 50 years ago as the main financing institution for L.A.’s burgeoning garment industry, Manufacturers Bank has targeted ethnic business owners. But after Mitsui Bank of California acquired Manufacturers Bank 30 years ago, that approach took on a new dimension.

The bank started lending to the broader Asian business community, including Japanese business owners in Little Tokyo.

Today, while Manufacturers Bank remains a subsidiary of Sumitomo Mitsui Banking Corp. and still targets Japanese customers, it’s trying to broaden its reach to even more ethnic business communities, especially Chinese and other South Asian businesses.

Just consider the bank’s No. 2 executive, President Naresh Sheth, who is from India. Sheth said the bank has been focusing on South Asian, Middle Eastern and even Hispanic business customers lately.

“We just held our 50th anniversary celebration, and as I looked around the room at many of our most loyal customers, it looked like the floor of the United Nations,” said Sheth, who reports to Chief Executive Mitsugu Serizawa.

The one unifying theme: The customers are business owners or executives. While there’s still a small garment industry component, Sheth said the bank now loans to food companies, light manufacturers, import-export businesses and some building material companies.

This diverse business portfolio took shape in the mid-1990s, after parent Mitsui Bank of California recapitalized the bank. That move came after a difficult period in which the bank’s finances suffered from overexposure to the local garment industry – which began shipping jobs overseas – and to real estate loans.

With its diverse portfolio and only 40 percent of its loans tied up in real estate, Manufacturers Bank was able to ride out the most recent real estate collapse and financial meltdown with few problems.

“We actually kept right on lending right through the downturn,” Sheth said.

Today, the bank is in strong financial condition, according to Dennis Santiago, chief executive of Institutional Risk Analytics, a bank consulting and analysis firm in Torrance.

“They are well-capitalized, way over the required minimums,” said Santiago, who added that the bank’s troubled assets rate is a very low 1 percent.

As a result, he said, the bank is primed for growth.

“They have figured out how to target a particular economic stratum across multiple ethnic groups. And with their strong capital position, they have plenty of room to grow,” he said.

Sheth said that growing the bank organically would be difficult given today’s overall slow-growth economy. Instead, the bank is focusing on making acquisitions. For example, just last month, it purchased the Glendale branch of National Bank of California.

Sheth said the bank is now on the lookout for more acquisitions of banks – or bank branches – with assets under $1 billion.

“We’re at $2 billion in asset size; we have the platform to go up to $5 billion,” he said.

— Howard Fine

Previous article Former IndyMac Chief Settles with FDIC
Next article Stocks Rise This Morning
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

No posts to display