BANKING—Banco Popular Plans Sunday Hours in Panorama City

Seeking to win over a market segment that has traditionally been suspicious of banks, Banco Popular will open its first San Fernando Valley branch this summer with an unusual twist full-service banking on Sundays. The new branch, to be based in the Plaza del Valle shopping center under development in Panorama City, is geared to the area’s large Latino population: mostly blue-collar families, many of whom don’t use banks at all. Puerto Rico-based Banco Popular hopes the seven-day-a-week schedule will lure converts by helping to promote its image as a customer-friendly bank that understands the needs of the population it serves. “What we found out from our current branches is many of our customers are two-income families, and traditional banking hours don’t work for them,” said Vernon V. Aguirre, California region executive for the bank. Commerce Bancorp, a regional bank headquartered in New Jersey with about $7 billion in assets, whose founder also owns a string of Burger King stores, is one of a very few banks that offers Sunday hours. Even Washington Mutual Co., which inherited a number of branches in grocery stores when it acquired Great Western Bank in 1997, closes those branches on Sundays. But for Banco Popular, particularly in a location like Panorama City, staying open Sunday offers the chance to cement its relationship with Hispanics, who account for about 50 percent of the bank’s customer base. “Large portions of the Hispanic population have traditionally not used banks period,” said Joseph Gladue, an equity analyst with The Chapman Co., an investment firm in Baltimore. “So, probably having a physical presence and going out of your way to make things convenient and friendly for people is one way of breaking down the mistrust of people of financial institutions.” Founded in Puerto Rico about 100 years ago, Banco Popular entered the mainland United States market in the 1950s with branches in New York, New Jersey, Florida, Texas and Illinois. The bank expanded into California in the 1970s and currently operates 16 branches in Los Angeles, Orange County and Chula Vista near San Diego. The right location Banco Popular was seeking a Valley location for some time when it came upon the Plaza del Valle site. The redevelopment project underway by Agora Realty Management and Construction is designed to capitalize on the population of about 650,000 people, largely Hispanic with an average income of $40,000, that live within a five-mile radius. Plaza de Valle will feature small retail shops, family restaurants and other entertainment venues and office buildings for social services like job training. The center will also have the kinds of open-air markets and gathering places typically found in town squares south of the border. “The location meets the needs of both heavy traffic, heavy Hispanic community and strong business community,” Aguirre said. Banco Popular, with more than $27 billion in assets, employs a number of strategies geared specifically to the Latino community. Each bank branch displays the flags of South and Central American countries, and caters to the Latino preference for face-to-face relationships by employing full-time tellers that get to know customers by name. “Many large banks have part-time employees,” said Aguirre. “It’s hard for the customer to have a relationship with part-time tellers. They’re constantly being asked for I.D. They’re constantly being scrutinized. When you get to know somebody on a personal basis, you call them by name, you ask how their kids are doing.” The strategy has worked well. For the quarter ended Dec. 31, 2000, Popular, Inc., the bank’s parent company, reported that net income increased nearly 15 percent to $75.5 million or 54 cents per share, compared with $65.7 million or 47 cents per common share for the comparable period in the prior year. Net interest income for the quarter rose 15 percent to $558.4 million, compared to $485.5 million for the like period in 1999. Revenues from other income rose 17 percent to $119.3 million from just under $102 million in the same quarter last year. But the bank’s Sunday strategy has not always been successful. An earlier attempt at a seven-day-a-week schedule at a Huntington Park branch was scuttled when Banco Popular found there was not enough traffic to support the expense of the Sunday opening. Aguirre attributed the problem in Huntington Park to the location of the branch, a sparsely-traveled sector of a shopping center. He plans to reopen the branch on Sundays when Le Curasao, a furniture and electronics retailer that caters to the Latino community, moves into the center later this year. Plaza del Valle, on the other hand, is surrounded by the Panorama Mall and El Super, a Latino supermarket, and should draw large crowds of shoppers as a result. In addition, the bank branch will share the 5,500-square-foot facility with another of the company’s divisions, Popular Cash Express, a 24-hour check cashing service. Aguirre said he expects the synergy between the two businesses to help build the bank’s customer base. Many Latinos prefer to use check-cashing services instead of traditional banking because of their experiences in their home countries, where banks are often embroiled in the country’s politics. “Recent immigrants do savings, but they do it at home under the mattress,” said Aguirre. “They also believe that some banks aren’t very interested in them as customers.” But by combining the check cashing with traditional banking services, officials said they hope that many customers will be persuaded to give the bank a try. “This is what the pilot is all about,” Aguirre said. “To what extent are we able to take a customer of Popular Cash Express and move them along the financial services path, beginning with a secured credit card to basic savings accounts and other services?”