National City Corp., a relative newcomer to the Chicago bank wars, plans to become a major player in the next few years.
The bank has 31 offices in Chicago and the suburbs and clusters in northwest Indiana, Kankakee and Rockford.
“We’ll open 18 or 20 next year, and we intend to open more than that the following year,” said David Daberko, chairman and chief executive of the Cleveland-based bank.
Six branches are scheduled to open in the first months of 2004, he said. The three-year goal is to have 100 offices in the greater Chicago area, said Daberko, who was in town this week to meet with branch managers and discuss the bank’s plans for the city.
If it can reach that 100-bank threshold, National City would be one of about a half-dozen banks with that large of a presence in the area.
Daberko said he is confident the bank can meet its goals in Chicago because of the success new offices have enjoyed.
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“The growth of these new offices has been unprecedented,” he said. “We’ve never had offices anywhere that grew as rapidly as the offices we opened here in the last 18 months.”
Daberko said some of the growth could come by acquiring a smaller bank, but, he added, there are no immediate plans to buy a local bank.
Last week, National City released third-quarter results that showed earnings grew 1.3 percent compared with the same period in 2002. Through September, the bank has reported earning $1.5 billion, or $2.42 a share, up 23 percent from the first nine months of 2002.
The bank also has expansion plans under way in Columbus, Ohio; Indianapolis; and Detroit.
“But the sum of what we do there will not be equal to what we’re going to do here,” Daberko said. “More than 50 percent of the new offices will be here.”
Bank `tying’ probed: Congressional investigators have been studying the practice of illegal bank “tying,” in which terms of loans or other credit are tied to the customer purchasing certain products or services.
The General Accounting Office concluded in a report released this week that there is little evidence of a problem. But, investigators noted, that may be because there is no good system for monitoring whether tying violations exist. Problems come to light only when customers complain, the GAO said, but many customers don’t know when a bank’s actions are illegal.
The investigators examined banks in Chicago, New York, Washington and Charlotte, N.C., over the past year in doing their analysis.
Federal regulators “have little information on customers’ understanding of lawful and unlawful tying,” GAO investigators concluded.
They recommend that the Federal Reserve and Office of the Comptroller of the Currency make it easier for banks and bank customers to get information about what constitutes illegal tying and improve ways to report it.
Smaller small businesses: Banco Popular North America, which is based in suburban Rosemont, is teaming with Accion USA, a non-profit lending organization, to boost support for “microenterprises”–small businesses that operate in homes and storefronts.
The partnership will include financial literacy programs, business training and access to capital and other bank products.
Banco Popular clients who don’t qualify for some loans will be referred to Accion for possible help.
Accion has agreed to provide its customers with details about services the bank can offer.
The pilot program for the cooperative effort is being launched in Chicago and New York.