Bankmark Sees National Push in Hispanic Banks

Business Wire - May 25, 2004

SAN LUIS OBISPO, Calif., May 25, 2004 (BUSINESS WIRE) -- Inspired by the estimated $600 billion in Hispanic purchasing power in 2003 (Pew Hispanic Center); the projection that remittances to Hispanic and Latino nations will reach $20 billion per year in five years (Pew Hispanic Center); and the targeting of Hispanic consumers by large institutions, Hispanic entrepreneurs are taking steps to form their own community banks.

Bankmark, a consulting firm that specializes in opening new banks, is quoted in American Banker article 'Aspiring Hispanic Startups Boast an Edge' written May 11, 2004, as having said that they are, "working with several groups organizing banks to focus on the Hispanic market, with another five in the pipeline that could launch as early as 2005."

So where is this trend coming from? Realizing that Hispanics themselves are better judges of the financial services they need and are likely to utilize, these entrepreneurs feel they are in a better position to serve their own financial needs, including small business loans, savings accounts, remittances, and other basic services, as well as specialized services for the sophisticated Hispanic consumer.

And it's not just the border states that are generating interest. Bankmark has received inquiries from markets including Denver, Charlotte, and Washington D.C., which can likely be attributed to the fact that Hispanics have migrated from border states throughout the country, resulting in non-border states with second and third generation Hispanic residents who are assimilating to life and money in the U.S.

James C. Foster, a Denver-based money manager of Dominican descent, hopes to service and educate the Hispanic market in an effort to help them achieve the financial knowledge and success that has eluded many of them thus far, simply because existing financial institutions are failing to understand the financial priorities and language-based needs of the Hispanic consumer.

Julio Lopez-Brito plans to open a bank in Washington D.C. because "Even with larger competitors such as Bank of America Corp. making concerted efforts to court Hispanic consumers and business owners, there is enough room for a bank with a Hispanic focus, and Hispanic professionals who are both shareholders and customers." According to Bankmark, industry consolidation does indeed create room for a new bank, though they feel the most successful are those that don't focus too narrowly on one segment of the population. "Minority bank implies that there is a limit to the customers you will serve," a Bankmark representative said. "But a community bank with a diverse and ethnically-oriented board serves everyone, and provides better opportunities for growth."

Though large institutions have already started to target Hispanic consumers through Spanish-speaking tellers and ATMs, Hispanic entrepreneurs and their community banks focusing on Hispanics will shortly be entering the market. And with their intimate knowledge of the Hispanic consumer, these banks will likely lead the way in the development of products and services that accommodate the Hispanic market.

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