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Friday, Mar 29, 2024

Banks, Large & Small, Line Up for Latino Customers

Banks, Large & Small, Line Up for Latino Customers By CARLOS MARTINEZ Staff Reporter Tiny Woodland Hills-based First Bank & Trust, like its larger banking brethren, is targeting the Latino business owner. Its new Hispanic Business Group will focus on developing loans, checking and other business accounts for the rapidly growing Latino market in the San Fernando Valley, said company CEO Gil Dalmau. The new unit will attempt to develop relationships with a variety of Latino-owned firms, often small businesses that cater to the Hispanic community, Dalmau said. The bank, owned by San Francisco-based First Banks America Inc., will offer a variety of banking products, including traditional lines of credit for working capital purposes, equipment loans, cash management, asset-based financing structured credits and owner-occupied commercial real estate loans. “Hispanic-owned businesses are growing at nearly eight times the national average,” said Joseph Arco, senior vice president of operations for the bank, who added that the bank is well positioned to serve the Valley’s growing Latino business community. The bank’s efforts follow along the same lines as similar programs at Bank of America and Wells Fargo Bank, the third and fifth largest banks in the U.S., respectively. In 1989, Bank of America launched its Hispanic Business program and in 1997 Wells Fargo began its Latino Business Services unit with $1 billion for potential loans nationwide. “We conducted a study prior to launching the division and we found that Hispanics believe they will not qualify for a loan so they don’t bother to apply, even though they would most likely qualify,” said Tim Rios, Wells Fargo vice president of community development. “But I think we’re slowly changing that way of thinking.” Elizabeth Kelderhouse, community affairs officer for the Federal Deposit Insurance Commission, said efforts to reach out to the Latino business community have been spotty at best. She said most banks have ignored the Latino business community, despite efforts like those at Bank of America and Wells Fargo. Calabasas-based banking attorney S. Alan Rosen said the Valley’s Latino business community would benefit from First Bank’s emphasis on their market segment. “This is a group that is vastly underrepresented by local banks,” he said. “So this could mean a very positive impact on our local economy.” First Bank’s Arco said the company hopes to make about $24 million in loans this year, and double that figure next year, through an aggressive outreach program that targets both large and small Latino-owned businesses. “It doesn’t matter to us if it’s a small store or a big manufacturer, we’ll make loans to both,” Arco said. Already, the three-week-old program has netted a $4 million loan to a Simi Valley business. Arco said banks have largely ignored the Valley’s Latino business community. “It’s not an easy area for banks,” he said. “You’ve got to know the market and you’ve got to know the community and you have to learn how to build relationships with the people.” Mike Zamora, a spokesman for Washington D.C.-based National Council of La Raza, said cultural differences have been a stumbling block for many Latinos in need of banking services. “Latinos, whether they are business people or not, prefer the personal approach when it comes to doing business,” he said. “And if they don’t know you or you don’t speak their language, they’re not going to want to do business with you.” A 1996 study by the council found that 42 percent of Latinos did not have a checking account, only 11 percent had mutual funds. As part of its Hispanic Business Group effort, First Bank will provide bilingual employees to assist customers and offer a variety of other programs to speed the loan application process, including an interactive bilingual Web site. Although Arco is unsure how much potential loan revenue the Valley’s Latino businesses could generate, federal statistics show that Los Angeles is the largest Latino market in the country. Latinos this year are expected to account for $453 billion in purchasing power, up from $420 billion in 2000. First Bank’s parent, First Banks America, reported net income of $16 million on $57.8 million in revenue for the quarter ending Dec. 31, compared to a year earlier when it reported $18.4 million in net income on revenues of $119.4 million.

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