SunTrust Banks Inc. has turned the ignition key on a Motorsports Private Banking Group to develop business with race car drivers and team owners.
Brian Williams, a senior vice president in SunTrust's private banking group, said on Tuesday that it is the first unit opened by a bank to specifically target professional motor sports, including Nascar and Formula One teams.
The unit will offer private banking, lending, and investment management services.
"People expect celebrities and entertainers must use sexy services and exotic products, but the fact is, we are using general private banking products here," Mr. Williams said. "Everyone has to bank somewhere. A race car driver or a team owner is not that different from another private banking customer. Where we add value is that we understand the industry."
Mr. Williams said the unit was inspired by the success of STI Music Private Bank Group, SunTrust's music industry-oriented unit. The latter was started in Nashville in 1988 to offer private banking services to the country music industry.
Last January the $125.4 billion-asset Atlanta banking company expanded the Nashville unit into offices in Miami and Atlanta. Mr. Williams said the Miami office, targeting the Latino music industry, and the Atlanta office, specializing in rhythm and blues and hip-hop music business, have been very successful in their first year.
"We thought it would be a year before we would have any credibility, but things have come along a lot faster," he said. "The timing worked well for us. 2003 was the year of hip-hop, and a large amount of content on hip-hop radio is coming out of Atlanta. Latin music was in a slump the last few years, but in 2003, record sales increased dramatically. Our timing was really, really good."
In October SunTrust announced it would sponsor a team in the Grand American Road Racing Series in 2004 to help introduce private-client and corporate banking services to the motor sports community. Mr. Williams said this industry, much like the music business, is very fraternal.
"These are very closed-end groups; it is not as easy to enter as [just] opening a branch and putting a sign out in front," Mr. Williams said. "A lot of people want to get into these industries. I compare it to joining a fraternity.
The motor sports team is based in Daytona Beach, Fla., and is being led by David Pijot, a 25-year SunTrust veteran who reports to Mr. Williams. Mr. Pijot has experience serving motor sports clients. Mr. Williams said that, much as with the music group, he expects the motor sports unit to take a national approach beyond SunTrust's footprint in the Southeast.
"A lot of the trails we followed on music took us all over the country. We learned how to get out of the footprint," he said. "Through the footprint we gained experience working with regional racetracks and working with some teams, and the Daytona bank has a rich history with the raceway [t]here. But we are not starting from scratch. This is a real opportunity for SunTrust."
SunTrust has company targeting niche wealth markets.
In Southern California, for example, $11 billion-asset City National Corp. in Beverly Hills has a division catering to entertainers and the entertainment industry. And two years ago State Street Corp. of Boston bought a Los Angeles firm, Bel Air Investment Advisers, that managed the portfolios of 200 super-rich and celebrity clients, including Barbra Streisand, Lee Iacocca, and Geraldo Rivera.
