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Popular Aims To Double In US, Seeks More Non-Hispanics
Popular Aims To Double In U.S.
BY BEN JACKSON
July 15, 2002
On a recent tour of his company's mainland U.S. operations, Richard L. Carrion, the president and chief executive officer of the Puerto Rico-based Popular Inc., said he plans to double its assets here in two years through a combination of acquisitions and internal growth.
The goal is ambitious by any standard, but the company's $5.5 billion-asset Banco Popular North America division has to accomplish it while far larger competitors, including Citigroup Inc., chase its core market: Hispanic consumers.
Banco Popular has 98 branches in California, Florida, Illinois, New Jersey, New York, and Texas. In an interview this month, Mr. Carrion said that as it doubles its asset size, Banco Popular will reposition itself as a "supercommunity" bank with a diverse customer base -- while retaining its image as the premier Hispanic bank.
Citi has been working to attract Hispanic consumers, particularly in California. Its acquisition last year of Mexico's second-largest banking company, Grupo Financiero Banamex-Accival, was meant to boost its ability to market consumer banking and financial services on both sides of the border.
"They're certainly a strong competitor in our market with credit cards," Mr. Carrion said. "They compete hard everywhere."
Banco Popular will use the same strategy against Citi as it has against all the other banks that compete in the Hispanic market, he said. As a "high-touch community bank," it has products to help recent immigrants send money home and to bring the unbanked into the banking system, he said.
For example, since 1998 the bank has opened 154 check-cashing stores, primarily in the West, and it now operates 55 mobile check-cashing trucks that visit sites where immigrants work. It hopes to use all these outlets to move people into the financial mainstream, Mr. Carrion said.
The bank has demographic trends working in its favor. From 1990 to 2000 the nation's Hispanic population increased by 58%, to 35.3 million, according to Census Bureau figures. That number is expected to reach 37 million by 2004 and 40.4 million in five years.
Claus W. Hirsch, an analyst with Corinthian Partners LLC in New York, said Banco Popular could expand in this growing market with specialty products and outreach programs.
For example, its Acceso Popular program allows Mexican immigrants to open accounts with a variety of forms of identification and provides them with two ATM cards. Customers can send one card to a person in Mexico, who can withdraw the money through an ATM there and avoid wire transfer fees. In a six-month pilot of the program in Chicago, the bank opened 500 accounts with average opening balances of $1,900.
The company is also working with the Federal Deposit Insurance Corp. in Chicago to promote the Spanish-language version of the FDIC's Money Smart financial literacy program. Javier F. Ubarri, Banco Popular's region executive for Illinois, said programs like Money Smart help draw in customers.
On July 8 the bank kicked off a bilingual ad campaign in New York, Chicago, Houston, Los Angeles, and central Florida.
But Banco Popular's expansion strategy is also focused on diversity. Already, more than half its customers are not Hispanic, Mr. Carrion said. "We're very proud of our Hispanic heritage and try to leverage that, but we don't discriminate."
The bank has achieved this diversification through branch and bank acquisitions over the past decade. For example, its 1992 purchase of four New York branches from Bank Leumi USA brought a significant Jewish clientele. After acquisitions in Chicago and California, Banco Popular had to find employees who could speak Hebrew, Yiddish, Polish, Ukranian, or Korean.
Mr. Carrion's tour, aimed at getting the growth message out to employees, came through Chicago on July 1 and ended in New York a day later. The message "is basically to do more of what we are doing," he said. "You can't really plan for an acquisition. If the right one comes along for the right price, we'll do it."
Mr. Ubarri called Chicago, where the bank has 21 branches, a market with significant room for growth.
Mr. Hirsch predicted that it would probably buy a non-Hispanic bank with between $3 billion and $5 billion of assets.
But Joseph Gladue, an analyst with Chapman Co. in Baltimore, said the bank may stick to its past acquisition pattern.
"They've typically made small acquisitions in a market" and built from there, he said.
Banco Popular Seeks More Non-Hispanics
July 7, 2002
Banco Popular, Puerto Rico's largest bank, plans to double its presence in the United States over the next two to three years.
Currently it has roughly 100 U.S. branches and a mortgage company with a large U.S. presence.
The bank has branches in Chicago, where its U.S. headquarters is located, as well as in California, Florida, New York and Texas.
Such rapid expansion would require acquisitions, said Richard Carrion, who runs the bank in Puerto Rico and was in Chicago last week to tell employees about the bank's first national U.S. advertising campaign.
Kicking off Monday, the TV, radio, print and billboard campaign will include a "bank for everyone" theme to attract more non-Latino customers.
"A lot of people erroneously assume we only serve Hispanics," Carrion said. "But over half our customers are not Hispanic, and we want to make sure everyone realizes that."
Carrion's father opened the bank's first U.S. branch in 1961 in the Bronx, following an outflow of people from Puerto Rico to New York. Banco Popular, which now trades publicly, was founded in 1894 by a group of men, including Carrion's great uncle.
Besides an ad campaign that invites non-Latinos to become customers, Banco Popular also plans to increase the number of branch employees who speak the languages that are common in the neighborhoods they serve. Already the bank has Polish-speaking employees in certain parts of Chicago, Yiddish speakers in Brooklyn and employees fluent in Korean in Los Angeles.
Banco Popular also plans to bring check-cashing services into more bank branches to appeal to the numerous immigrants who prefer check cashing, money orders and wire transfers to traditional bank accounts.