Portuguese-owned lender making inroads in southeastern Massachusetts banking market
Bcpbank has one thing its competition lacks: strong name recognition in the
Portuguese-speaking population.
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Its parent bank, Lisbon-based Millenium bcp, is the largest financial group in Portugal, with $75 billion in assets. Its sheer size makes it a household name among this targeted population, even in the United States.
It is from here that the bank wants to continue aggressive expansion plans that will include 90 branches throughout the Northeast in the next three years.
Bcpbank, which operates out of Newark, N.J., already has two southeastern Massachusetts locations, one each in New Bedford and Fall River. Each city will get one more apiece in the near future and officials are investigating where to put a fifth branch in towns between the two cities, the company said.
Also, a regional headquarters is under construction in Fall River.
“We want to start by playing to our strengths,” said Pedro J. Belo, CEO of U.S. and Canadian operations at bcpbank. “These people know who we are and what we’re all about.”
Belo said that after gaining a foothold in this community, he hopes to break out of the ethnic mold. He said the bank has been structured to take advantage of what he sees as a market riddled with acquisitions and behind Europeans in terms of technology.
Belo said the region has the densest population of Portuguese speakers in the country, which is pegged at 279,000. The largest population, 360,000, is split into two locations in California.
Belo added that the banking market in Portugal is much different when compared to how Americans bank.
“For instance, customers are used to getting a CD in one bank, putting their savings in another and getting a mortgage from yet another,” Belo said. “In Europe, customers use one bank for all these services.”
He adds that more advanced banking technology from across the Atlantic will be used to entice customers. Although they are not in place here yet, ATMs in Portugal can be used for mail, to pay utility bills and taxes, charge and download information to cell phones and even buy movie tickets.
Bcpbank plans to open 90 branches in the next three years in a region including New Jersey, New York, Canada and Massachusetts. There are already 17 branches throughout the Northeast, including the two in southeastern Massachusetts, seven around Newark, one in Springfield, Mass., and seven in Canada.
The company expects new locations to be placed where Portuguese-speaking populations live. This includes areas like Cape Cod and Boston, which have experienced an influx of immigrants from Brazil.
Although bcpbank has name recognition among its target market, it’s for the most part unrecognizable to the typical banking customer in the United States; this, Belo says, is to the company’s advantage.
“To the general population, we are not perceived as an ethnic bank,” he said. “This will make it a little easier to grow outside the Portuguese-speaking market as our name gets out.”
Mary Lynn D. Lenz, president and CEO of Somerset, Mass.-based Slade’s Ferry Bank, said bcpbank is just another big financial institution with deep pockets coming into her market footprint.
She said it is one in a group of five that includes Charlotte, N.C.-based Bank of America, Philadelphia-based Sovereign Bank, Connecticut-based Webster Financial and Maine-based Banknorth.
“I think they are all pretty much unfamiliar to the population here,” she said. “I don’t think our customers are going to wake up and say, ‘I want to go to a really big bank.’”
Lenz said Slade’s established roots in the area, particularly among the Portuguese population, will be enough to keep up with the competition.
Mary Santos, vice president of the Bank of Fall River, said she has kept an eye on activity at bcpbank’s first branch in the city.
“They are such a big and aggressive bank,” she said.
Todd Stender, an analyst with Crowell, Weedon & Co. in Los Angeles, says it is definitely possible for an ethnic bank to grab a share of the traditional U.S. market.
He’s seen the San Marino, Calif.-based East West Bank extended beyond its Chinese-American target clientele. The bank targets a “mainstream” audience by going head to head with larger institutions like Bank of America with competitive CDs and higher interest rates.
In order to do this, East West subsidizes this strategy by offering lower interest to the Chinese-American community.
“This bank literally speaks the language of its customers,” Stender said, “and this community is willing to pay for this service.”
Bcpbank plans to expand into its target market via organic growth, meaning it will choose to open branches rather than acquire other banks to increase its base.
“Acquisitions are not an option for us,” Belo said. “We would have to pay two premiums – one for the deposits of a bank and the second on the renovations to the branches. This is very costly.”
The recent expansions come at a good time for the bank as the euro, the currency of Portugal, is worth about 25 percent more than the dollar – this makes expenditures here a little easier for European investors to swallow.
Bcpbank reported that as of 2002, it had assets of $208 million and $184 million in deposits. This comes after an initial investment of $22 million to start in the United States market.
“We are ahead of schedule and we expect to break even by the summer of 2005,”
Belo said.
