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American Banker

Doral's Speaking Spanish And More in New York City


January 9, 2003
Copyright © 2003 Thomson Financial, Inc. All rights reserved. 

Like other Puerto Rican banking companies, Doral Financial Corp. wants to multiply its branches on the mainland. Unlike them, it aims to court all ethnic groups.

Chief financial officer Richard Bonini said Monday that the goal is to build as many as 20 Doral Bank FSB branches in the New York metropolitan area in the next three years and triple its assets there this year alone, to $1 billion.

The $4.6 billion-asset San Juan company entered New York in 1999 and now has three branches there. It plans to add at least five this year.

Doral has mostly sought Hispanic customers, but its next branch, to open in February, will be in an Asian-American section of Queens.

"We are not looking to establish ourselves as a Puerto Rican operation," Mr. Bonini said. "We are looking to establish ourselves as an operation dedicated to service."

R&G Financial Corp. and Popular Inc., also of San Juan, have announced their own mainland expansion plans. R&G, which has $5.4 billion of assets, entered the states in June by buying an Orlando thrift and is now looking to branch into New York. Popular, which has $32.8 billion of assets and has been on the mainland since 1961, said this fall that in five years it wanted to triple its number of Banco Popular branches from the current 100.

To stand out among the dozens of banks in New York, Doral is hiring local people -- its salaries are higher on average than other New York banks' -- who know the communities and the languages spoken there, Mr. Bonini said.

Marketing also speaks the neighborhoods' language, but in a business sense. For example, in the Dominican Washington Heights neighborhood, Doral emphasizes and explains banking fundamentals, and in working-class Astoria neighborhood -- an enclave of Greeks, Italians, Moroccans, and Hispanics --it plays up its certificate of deposit rates and uses more direct mail.

Another plan for its new markets is to strike partnerships with community groups and churches.

"What we have to do is go beyond the no-cost checking and Internet banking. We have to learn to eat chicken with the people," Mr. Bonini said, citing a Puerto Rican saying. "Understand their problems and address them."

Gary Gordon, an analyst with UBS Warburg in New York, said that even with all these ideas, Doral may struggle to distinguish itself in a crowded market that is getting more so. Commerce Bancorp Inc. of Cherry Hill, N.J., and Washington Mutual Inc. are actively opening branches there and several Asian-American banks from California see New York as the logical starting point for East Coast expansion.

"The retail banking business is heating up in New York," Mr. Gordon said. "I think there is going to be much more competition in the next five years than the last five years, and Doral may have bigger challenges than they hoped."

Few of those rivals have targeted lower-income people, however, so going that route might work in Doral's favor, Mr. Gordon said.

Doral also aims to build more branches in Puerto Rico, where it is the largest mortgage lender, and is scouting acquisitions in the United States. Mr. Bonini said it would not go outside the New York market unless it could buy a bank, thrift, or mortgage banking company in a major metropolitan area.

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