Chinatrust in L.A. Changes Name, Bids to Fill Void Left by U.S. Banks

Chinatrust Bank in Los Angeles has ambitions that go beyond the nationality embedded in its name.

The $1.5 billion-asset bank is set to rebrand itself as CTBC Bank and begin offering new products in an effort to appeal to more customers than just those of Chinese descent. Its Taiwanese parent, Chinatrust Commercial Bank, changed its name to CTBC Bank Co. in June as part of the makeover.

"When we were a small organization focused on the greater China market, the name Chinatrust had a lot of resonance," says Noor Menai, the president and chief executive of the U.S. bank. "Now we find ourselves with a much bigger global opportunity."

The U.S. financial crisis created unique opportunities for smaller, well-capitalized banks like CTBC, says Menai, who joined it in January after serving as head of governance and retail banking in North America for the parent company.

"People lost confidence in large banks," Menai says. "So there is a huge opportunity for us to keep servicing our core ethnic market while also tapping into emerging demand. What we can offer is the resources of a much larger bank in a much more familiar and intimate setting."

CTBC joins a growing list of banks that have adopted new, less confining names.

North Jersey Community Bancorp changed its name to ConnectOne Bancorp in January. On Monday, BNC Financial in Connecticut changed its name to Bankwell Financial (BNFI); it also merged its Bank of New Canaan and Bank of Fairfield into a single bank that took on the Bankwell brand.

Naugatuck Savings Bank in Connecticut is planning to change its name to Ion Bank, though it took management two years to come up with the updated brand. "You would not believe how hard it is to come up with a name," Chuck Boulier, the company's president and chief executive, said in an interview last month.

While dropping "China" from its name may help CTBC expand beyond a niche client base, some potential customers may be mystified by the acronym, according to Steven Reider, president of consulting firm Bancography.

"I'm not a fan of pure letters that don't mean anything," Reider says. "You only have a limited number of opportunities to tell the public something about your institution."

On the other hand, the acronym offers CTBC a chance to start with a blank slate. "Since the name is totally devoid of meaning," he says, "CTBC can invest whatever meaning it chooses into it."

CTBC plans to ramp up in corporate lending and residential mortgages, Menai says. It has already been hiring staff, including new heads of risk management and retail banking. In February the bank also hired Edward Kim, a former executive at Cathay Bank (CATY), as its chief lending officer.

"On the corporate banking side, there is a huge amount of pent-up entrepreneurship in the" United States, Menai says. A number of potential customers "have been sitting on the sidelines" after being rattled by the financial crisis.

"Money is coming back into the market," Menai says. "There are Silicon Valley real estate communities that are ready to invest, but a lot of the lenders they've traditionally gone to are still getting their houses in order. … People want a bank that's easy to work with and has the capital to lend, so that they don't wind up left at the altar."

As CTBC expands its mortgage lending business, it is especially eager to work with Latino and African-American communities.

"These communities have historically been underserved because other banks' business models don't allow them to lend," Menai says. "Ours does. We're a next-door bank, and that gives us plenty of opportunity to serve ethnic markets other than our own."

In a move to appeal to more diverse clientele, CTBC relocated its headquarters from suburban Torrance to downtown Los Angeles in June. The bank, founded in 1989, has 12 offices in California, New York and New Jersey.

"The models I'm enamored with … are the ones where you don't have to invest in huge amounts of real estate to get people the services they need," Menai says. "If you design products and services people fall in love with, you don't need a branch on every street corner."

Menai was president and chief executive at Charles Schwab Bank in 2007. His background also includes senior positions at Citigroup (NYSE:C) and Bank of America (BAC).

"We're building a team of specialists who've all risen to the top of their markets," Menai says. "And that kind of team is what leads to greatness."