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Wednesday, Jul 6, 2022

Ancillary

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JULIE SABLE

Staff Reporter

Consolidations and mergers have hit the banking industry with the force of an earthquake throwing people out of work, disrupting established business relationships and changing the course of local commerce.

But just like construction trades prosper following a devastating temblor, so too are there businesses that benefit from the consolidation trend.

Executive recruitment firms get additional business, investment banks get referrals for small clients the larger banks don’t want to handle, and leasing brokers have more space to fill.

Operation Hope Inc., a non-profit group that provides funds for small businesses in inner city areas, say the wave of consolidation has created more business opportunities.

“In the underserved community that we serve, people are already skeptical of the banking industry and when they hear of the mergers going on, they tend to seek us out instead,” said Lance Triggs, the group’s vice president.

Operation Hope lent $15 million in residential and small business loans in 1996, up from $6 million the year before. Triggs attributes 20 percent of that increase to bank mergers.

“I tend to notice that people just aren’t comfortable with the big banks as they still want the personal attention and privacy that small lenders such as we can provide for them,” he said.

Attorney Barry A. Smith said he benefits from bank mergers he is a mergers and acquisitions specialist for Buchalter, Nemer, Fields & Younger.

“State regulatory agencies require specific documentation when working on a merger or aquisition and so preparation of these is usually the first task that attorneys face,” Smith said. “Attorneys also negotiate and prepare employment contracts of bank employees,” he said. “With all of the movement within the banking industry lately, there has been plenty of work along these lines.”

Jim Zukin, senior manager director at the investment banking firm of Houlihan Lokey Howard & Zukin, said the new mega-banks created by mergers are throwing more business his way.

“Banks are outsourcing more and consequently, we have seen a significant increase in bank referrals,” Zukin said. “This is one factor that has contributed to our dramatic growth within the last year.”

Advertising agencies and public relations firms also appear to be reaping the benefits as banks are spending a considerable amount on advertising, including a series of full-page ads taken out by H.F. Ahmanson & Co. and Washington Mutual Inc. on the progress of their takeover battle for Great Western Financial Corp.

“During mergers, banks need to take control of their voice to consumers and advertising is the best way to do that,” said Bonnie Baruch Barnes, president of the Advertising Club of Los Angeles Inc.

Additional P.R. and advertising money is spent once a merger takes effect, as the surviving firm tries to establish ties to customers.

L.A. area employment specialists and often their clients have benefited from the mergers.

“There are more job opportunities now than we have seen in eight years,” said Roger Miller, partner at Ryan, Miller & Associates, a Pasadena-based executive search firm specializing in the banking industry.

“Employees who lose their jobs through mergers often find that their skills are in demand outside the industry,” he said.

According to Miller, there was a 25 percent to 30 percent increase in the number of openings within the financial services employment market in 1996.

“Employees that are customer-service oriented and keep up with technological advances will have no problem finding jobs within the financial markets,” he said.

Another firm that has benefited from mergers is Norrell Services Inc., a downtown L.A. temporary placement firm, said J.L. Donahue, vice president and general manager.

Specifically, the pool of qualified temporary workers has expanded greatly as a result of layoffs in the banking industry, he said. Many of these workers are now finding temporary employment in other areas, including manufacturing, distribution and customer service.

Although the abandonment of a building may hurt the landlord, it also creates opportunity for leasing agents who can get new commissions filling up a bank-vacated building.

“Empty bank branches create opportunities within the real estate market for brokers who have more space to lease,” noted Brad Cox of Cushman & Wakefield of California Inc.

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