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After establishing a mainstream banking presence in Manhattan, Doral Bank New York readies to serve the consumer and business banking needs of Hispanic and other minority communities practically ignored by bigger banks
New York---A year ago it opened its first branch in New York, at Park Avenue South in Manhattan. In the next 24 months, Doral Bank will open 10 new branches in the Big Apple. The fast-and-furious expansion begins next month with a new Doral branch in heavily Hispanic Washington Heights.
Doral Bank New York will open four branches this year and five or six new ones in 2002, Salomon Levis, chairman and CEO of Doral Financial Corp. told CARIBBEAN BUSINESS.
The banks projections on the financial performance of its aggressive stateside expansion are equally impressive. In five years, Levis expects Doral New Yorks contribution to holding company Doral Financial Corp.s annual revenue to jump from 3.5% to 20%.
For the year ended Dec. 31, 2000, Doral had consolidated net income after taxes of $84.7 million on revenue of $164.6 million.
"This year were aggressively penetrating the Hispanic market in New York because our current location is not in a Hispanic area," said Levis. "We wanted to start with an important presence in Manhattan, which is the most important borough and then start expanding from there."
With a name that belies any particular Hispanic connotation, Dorals New York strategy indeed seems to have been first to establish a presence in the mainstream banking community staffed, not with islanders, but with New Yorkers, like Robert E. Reiner, president and COO of Doral Bank New York and Ed Baynes, vice president and branch manager, both veterans in the New York banking industry.
With a fresh, personal approach, Doral Bank now plans to concentrate its efforts in capturing New Yorks fast-growing minority community markets, long underserved by larger banking operations, according to Levis. The bank will also offer a friendly alternative to the Anglo market. "Were a Puerto Rican bank that will cater to all minority groups, not only Hispanics, in addition to the general population," Levis said.
Even though Dorals first branch in the Big Apple is not located in a Hispanic neighborhood, the results of its first year of operations heralds a bright New York future for the Puerto Rican bank in the years ahead.
The 10,000-square-foot downtown branch exceeded expectations with more than 2,000 accounts, $105 million in deposits, and $160 million in assets in its first year. The bulk of its portfolio consists of loans in the $1 million to $5 million range. Levis estimates future Doral New York branches will generate $50 million to $75 million in deposits in their first year, at least $25 million more than the average new branch in Puerto Rico.
"Just consider what weve accomplished in Puerto Rico. Then compare the island to New York, which has three times the population of Puerto Rico and where the average purchasing power is three times that in Puerto Rico," he said. Levis recalled that when Doral Financial acquired Cataño Federal Savings Bank in Puerto Rico in 1993 to enter in the banking business, it had $13.5 million in assets and $500,000 in capital. Seven years later, the bank has $2.6 billion in assets and $140 million in capital.
"For small and medium-sized businesses and in terms of consumer service, I consider the banking industry in Puerto Rico superior to the banking industry in New York," Levis said. Bolivar Almonte, immigrant from the Dominican Republic and a New York client of the bank, agrees, "All banks offer the same financial services. But not all banks offer the same personal touch," he said. "Dorals philosophy will fill a gap by catering to the needs of the minority communities whove been underserved in New York. We didnt have that before Doral came in."
Expansion in New York
At an average cost of $300,000 to $500,000 each, Doral Bank will open four additional branches this year, mainly in minority communities.
"We are opening in locations traditionally not sought after," said Doral New York President Reiner.
Doral Banks second New York branch opens in March in Washington Heights, a commercial area heavily populated by the Dominican community. The branch will be across the street from a Citibank branch and an Apple Bank branch. CARIBBEAN BUSINESS visited the Citibank and Apple Bank branches in Washington Heights on a Saturday around 1 p.m. and found them packed with customers waiting in long lines for tellers and the ATM.
"We are going to be in the commercial heart of Washington Heights where there are many successful Dominican businesses. This is where the action is," Levis said.
In Washington Heights, Doral will open seven days a week. During the week it will operate from 8 a.m. to 5 p.m., Saturdays from 9 a.m. to 3 p.m. and Sundays from 1 p.m. to 5 p.m. "Ive always questioned why banks consider themselves different from retail stores, which in many cases open till 9 p.m.," Levis said. "If needed, we will always open extended hours."
After Washington Heights, the next branch will be located in Coop City, a complex of some 15 building in the Bronx with more than 10,000 units and a mixed community that includes African Americans, Anglos, and Hispanics. Another branch is planned for Astoria, a Queens neighborhood long populated by Greeks and other European immigrants, but is now about 40% Hispanic.
Although there are other banks in the area, for Levis, "A presence is not about having a building (branch), but about the people, about showing interest in the customer."
"Were very active in the community," added Reiner. "We offer attractive rates, are pro-marketing and advertising, and were open extended hours. We accommodate their needs."
This year Doral Bank plans to boost the number of new accounts. "We will educate Hispanic and minority community residents about the importance of having a bank account and good credit," he said, adding that, just as in Puerto Rico, less than half of the population in those communities has a bank account.
"We want to facilitate bank credit for minority businesspersons and entrepreneurs."
In addition to consumer loans, Doral Bank wants to extend credit to small and medium-size businesses.
Serving the underserved
Say Doral in Puerto Rico and most everyone will think Doral Mortgage, Doral Bank, or Doral Securities. Say Doral in New York and theyll say. . . Say what?
Not for long. With the slogan the bank that helps you grow, Doral is getting to be the best friend to the communities that big banks practically ignore. The strategy might pay off big.
"I worked in a major bank for years and we didnt even bother with small businesses," said Ed Baynes, vice president and branch manager of Doral Bank New York, who has worked in Fleet Bank, among other New York banks. "The trend is for big banks to downsize their retail operations. And they are just not giving good service to the people in the communities they are supposed to serve."
According to a Crains New York Business article last month, the market in commercial bank deposits in New York City is approaching $200 billion. Titled Morgan merger shortchanges retail at Chase, the article highlights how the J.P. Morgan Chase merger has fostered the formation of a world banking superpower while all but losing one of Americas greatest retail banking franchises in the shuffle.
Indeed, Putnam Lovell Securities analyst James Mitchell thinks theres a 40% chance that five years from now, J.P. Morgan Chase will have sold out its consumer division entirely. Theres "not a clear synergy with their institutional business, 8% of their business is now institutional," Mitchell is quoted saying. With 418 branches, J.P. Morgan Chase is the largest consumer banking operation in the tristate area.
"That is why our entry in the market is so timely," said Levis. "We are entering the market when the big players are going out." With that in mind, Doral Bank, as the anti-Chase, preaches a gospel for the people. And, according to Levis, theres plenty of room for all who may want to tap into a market increasingly being left underserved by bigger stateside financial institutions. "We are not here to compete with Banco Popular, but with the American banks."
"Big banks dont do anything that is not automated," adds Baynes. "Here we are all about customer service. We believe in the people. We do whatever it takes. We spend the extra time."
"The banking industry has thought that it can please clients by offering electronic services. Although it helps, they cant substitute the personal relationship," Levis said. "As long as our customers are human beings, they should be treated as such. That doesnt mean we dont have state-of-the-art banking technology. Its a combination of technology, competitive products, and a nice looking branch with agreeable and professionally competent people. We treat customers with heart. And customers will tell you when you dont. They are the best supervisors in any company."
Supervisors at Doral Bank New York seem to agree.
"Doral provides good service and they are very attentive to our needs," said Andy Unanue, COO of Goya, which has its corporate headquarters in New York. "Its not only about putting new branches, they are dedicated to give back to the community. They go the extra mile."
Nellie K. de Gouverneur, originally from Venezuela, who has worked in banking in New York for 10 years and served as vice president at Bank of New York, told CARIBBEAN BUSINESS, "I have plenty of experience in banking and I was eager to receive good service. Its those extra little steps that make the difference. Doral gives that in every visit."
"The big difference when one compares Doral to other banks is that they dont see us as numbers, but as individuals," said Juan R. Espinal, owner of Los Primos Meat Market in Brooklyn. "Doral is getting to be the entity that we Hispanics need to help us progress. It shows in the way they work with the community and the businesspeople. Unlike other banks, Doral listens." Los Primos Meat Market, with a 300-restaurant clientele, has average sales of $18 million to $20 million a year.
"And this is testimony of the general population, not only Hispanics or minorities. If not, why would they be with us? We do creative financing if needed. We listen to our clients and their needs," Levis said.
Morris Jaffee, a Jewish Anglo born in the Bronx agreed. "When this bank started, I didnt know what it was. I used to belong to Chase and I hardly knew anyone there," he said. "When I walk into this bank I know everybody, its like my home. People are so friendly. Im thrilled being in this bank."
Still, Doral Bank New York will target minority communities as its initial growing strategy. Almost twice the size of Puerto Ricos population, that market offers the bank plenty of playing ground, as many in that community feel underserved by the New York banking industry.
"After occasionally using the banking services in New York, I noted the lack of good service and I thought these people dont treat their clients well. I asked around and friends told me the same," Levis said. "Small and medium-sized clients dont receive good treatment, its very impersonal."
"For instance, we met with the consul of the Dominican Republic who told us that hes been to another bank a couple of times and they dont even know he is a client there," he said. "The lack of personal attention the average depositing client in New York experiences is accentuated even more in the case of Hispanics or minority groups because of language and cultural barriers, especially those people who are not fluent in English."
The Greater New York Metropolitan areawhich covers up to15 to 20 miles outside New York Cityhas a total of 12 million to 14 million residents. About 40% of New York residents are either immigrants or descendants of immigrants, noted Levis. These immigrant groups include Hispanics, Asians, and Europeans among others.
"Irish, Jews, and Italian-Americans who currently are not considered minorities according to the U.S. Census Bureau, remain identifiable ethnic groups because of culture and religion," he said, adding that there are one million to two million Jews in New York City to whom Levis, because of his Jewish background, finds it easy to relate. Another important minority group is the African-American community, noted Levis, although they are not immigrants. Of all, Hispanics remain the fastest-growing group in the U.S., he added.
"My experience has been that American banks treat Hispanics as third tier citizens," said Ruben Luna, an immigrant from the Dominican Republic, owner of Key Foods and C-Town Super Market. "I applied for a small loan at an American bank and seven months went by before the bank said we didnt qualify. Then they called back to say they had changed their minds."
Luna is a member of the National Supermarket Association, a 350 supermarket-owners organization to whom the bank presented its services. "This is the first time in 10 years that a bank has approached us," Luna said. "We were very impressed and we will support the bank. As the bank grows and opens new branches, well give them all our accounts."
||Doral Bank Puerto Rico:
Also undergoing an aggressive expansion, Doral Bank has 85 vacancies available at the moment.
Today inaugurates the first subsidiary of Doral Financial Center, its new one-stop-banking concept. Meanwhile, the company has plans to open 10 to 15 Doral Bank branches in Puerto Rico, Salomon Levis, chairman and CEO of Doral Financial told CARIBBEAN BUSINESS.
Located at De Diego St. and Ashford in El Condado, the branch will be the first of four others scheduled to open this year, noted Mario Emmanueli, public relations director. The Condado branch has ample parking and will open extended hoursuntil 7 p.m. on weekdays. The next Doral Financial Center, located in Las Catalinas shopping center in Caguas, will be inaugurated in March.
Referred to as three-dimensional banking by Doral executives, the concept unites the services of Doral Mortgage, Doral Bank, and Doral Securities under one roof. "The new concept provides clients all financial services with one visit," said Emmanueli.
Doral Bank Puerto Rico, which has more than $2.6 billion in assets and contributed $25.2 million or 30% of the companys total income, according to the companys consolidated net income, will end the year 2001 with about 32 branches. --L.G.