The downtown Los Angeles branches of two Korean banks display prominent banners that at first look out of place: words of welcome in Persian.

However, the greetings make sense in the context of the balance sheets. About half of Los Angeles-based Wilshire Bancorp Inc.'s loans and a third of Center Financial Corp.'s go primarily to Iranian customers, along with some Indians and Pakistanis.

The banks, which were started by Korean immigrants and service mostly Korean merchants, have been penetrating other ethnic enclaves for years. But now they're stepping up their efforts as they struggle with the sluggish economy, low share prices and the notion that their traditional customer base is well saturated.

"To make both deposit and loan growth possible, we have to look at the non-Korean sector," said Joanne Kim, interim chief executive of Wilshire State, the third largest Koreatown bank, with $2.1 billion in assets. "I don't know where else I can go in the Korean community."

Korean banks are positioned to market to this clientele in L.A. because they have an established model to serve an immigrant community, and they have far more locations than the banks that serve Iranian communities.

Some Korean banks have been more successful with this strategy. Wilshire Bancorp, parent company of Wilshire State Bank, hired an Iranian-born chief marketing officer in 2001. It's now leading the pack among more than a dozen Korean banks based in Los Angeles.

Wilshire State has been boosting its efforts recently to target the Iranian and Indo-Pakistani client base by hiring more bankers from those communities.

The Korean community is overbanked, said analyst Brett Rabatin at FTN Midwest, which monitors L.A.-based Korean banks.

"The problem with the Korean banking sector is that six years ago, you only had six banks. Now there are 15," Rabatin said. "Eventually we're going to see consolidation, which would create a healthier environment for loan and deposit growth."

Those 15 banks are scrambling to serve the estimated 350,000 ethnic Koreans in Los Angeles County.

By contrast, according to one federal estimate, there are up to 109,000 people of Iranian descent in Los Angeles County. That's only about one-third the number of Koreans, but there is one prominent ethnic Iranian bank.

The Korean bankers said they appeal to Iranian customers, and several other immigrant groups, because of their belief that the institutions respect and value immigrant entrepreneurship. After all, it was a handful of Korean banks that financed the boom of L.A.'s Koreatown district, which dates its beginnings to a small grocery store on Olympic and Harvard boulevards in the late 1970s and now boasts a thriving enclave of shopping malls, financial centers and upscale condos under construction.

One of Wilshire State's customers is Platinum Wireless, a West Los Angeles telecommunications company with $100 million in sales last year. Platinum's chief executive is Jeff Javidzad, an L.A. businessman with Iranian roots.

"The culture of the bank is that someone can be an immigrant and run a successful business," Javidzad said.

Wilshire State's Iranian customers frequent its downtown branch, which serves as a gateway to other banking services. The branch draws on a high concentration of Iranian merchants in the fashion district, said Parviz Semsar, who's based at the branch and is senior vice president of the bank.

"Both Korean and Iranian businesses are very strong in downtown," Semsar said. "That's why you see more foot traffic here from both communities than any other branch."

Why Persian?

Not only are Korean banks focusing on Iranian customers because they are underserved, said Jae Whan Yoo, chief executive of Center Financial, with $1.9 billion in assets, but because Iranian merchants prefer community banks where they have access to top bankers.

"If they go to Bank of America, they're treated as a minor player," Yoo said. "We treat them like kings and they're happy."

There are also cultural similarities. So much so that Steven Aminpour, chief marketing officer at Wilshire State, doesn't see any differences, "except for maybe the food."

"We are both hard-working immigrants, we are passionate about our children's education and we take care of our elders," Aminpour said. "Personal relationships in business are important."

Kim of Wilshire State sees a market that's comparable to the Korean community about a decade ago. Many of her Persian clients are new immigrants, who may have a hard time getting lines of credit from mainstream banks because of a lack of credit history. They are entrepreneurs who left everything familiar in their home country to make a new life for themselves and their families. As a lender, Kim said, judging a client's character is just as important as scrutinizing the credit history.

"Iranian immigrants are incredibly loyal and hard-working," Kim said. "This is their life. They're going to make their payments and make it work."

L.A.'s apparel industry contributes to the banks' clientele, as downtown's fashion district is dominated by Korean and Iranian wholesalers.

In 1995, Brand Noparvar began banking at a Center Financial branch near Santee Alley because it was close to his shop. The Iranian staff at the branch made him feel at home; the bank's knowledge of the apparel industry and its expertise in moving funds quickly to Asia kept him as a customer.

"They understand fully what's at stake in the business of clothing," said Noparvar, president of U.S. Top Importers Inc. "This is something I don't know if I could get from the bigger banks."

The Iranian-born Noparvar had previously done business with other Korean manufacturers in the fashion district and said he didn't feel awkward walking into a bank filled with Korean signs where the predominant language is often Korean.

Noparvar has never banked with First Credit Bank, a Persian bank in Los Angeles. He sites convenience as a factor, since First Credit does not have nearly as many branches as Center Financial's 10 in L.A alone.

Henri Levy, a French-Moroccan businessman, who switched to Wilshire State two years ago, said he appreciates the personal attention and access to top executives. The bank is financing his new medical office development near Encino-Tarzana Medical Center.

"I can't lose time when I'm moving projects," Levy said at Wilshire State last week. "I come here and they can take me right up to the chief executive and she tells me whether I have the loan or not."

Capital flow

This is not to say that Korean banks will abandon their core lending business commercial real estate accounts from Koreans merchants.

The Koreatown economy remains strong, supported in part by South Korea. Its government recently raised an overseas investment cap on real estate from $300,000 to $1 million, opening up business in the states.

Added business will come if the federal government allows citizens from 30 countries one of which is South Korea to travel to the U.S. without a temporary visa.

If those changes help banks in Koreatown, they could use it. Last year, top Korean banks saw their stock prices tumble by about half, and delinquencies dot their balance sheets.

Last quarter at Wilshire State, for example, loans 30 days overdue grew by 80 percent to $22 million, although that is still a small amount of its total loans.

To grow new accounts, banks must diversify their business, said analyst Rabatin.

"If you're going to continue to grow, and not expand geographically, then you have to find a way to find new customers," he said. "You either go mainstream or find other ethnic groups."

Going mainstream has proved treacherous for some.

Hanmi Financial Corp., the biggest Korean bank, with $3.8 billion in assets, tried to compete with national commercial banks while offering more products to existing Korean customers. In December, former Chief Executive Sung Won Sohn left abruptly, after Hanmi's stock plummeted more than 60 percent during the year.

There were high expectations for Sohn, former chief economist of Wells Fargo & Co., to take Hanmi mainstream, Rabatin said. The bank's interim chief executive, Chung Hoon Youk, did not return calls seeking comment.

Hanmi's rival Wilshire State also lost its chief executive, Soo Bong Min, on the same day. His retirement had long been anticipated.

"Mainstream is a highly competitive market," said Benjamin Hong, chief executive of Saehan Bancorp, a modest $730 million-in-assets bank that also is trying to reach out to the Persian community, although less successfully than Wilshire State or Center Financial.

Said Hong: "Most Korean banks would rather cater to another minority group that is not as established as the Korean community."

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