The document discusses the competitive environment and new business development strategies of several large banks in 2011. It notes that banks are focusing on growing lending while reducing commercial real estate exposure. Specific banks' plans mentioned include PNC growing lending and treasury management services, Flagstar emphasizing commercial, small business, and retail lending, and 5/3 expanding in small business, private banking, and treasury management. The document recommends that banks bundle solutions to meet operational needs of prospective business clients.

1. The Competitive Environment and New Business
Development in 2011
CONTACT: 248-321-1405. RGRANT56@GMAIL.COM
February 2011
How Will You Compete?
In 2011, banks are “turning community they will do: Health Care, and Equipment Don’t deliver a Loan Proposal.
on the faucet” as the com- Finance. Desire to grow Deliver a bundle that provides
PNC: Growth through in-
pression of fee income and loans while reducing CRE credit, improves cash collec-
creased lending. Focused on
the inability to further reduce exposure. Net interest mar- tion ( RDC, Lockbox, Merchant
Treasury Management Ser-
operating expenses is putting gin target is 3.3%-3.75%. Processing, ACH Collections),
vices, including emphasis on
more pressure on the need to helps manage payables
purchasing cards. Looking for Flagstar: Greater emphasis
grow net interest income, or ( online bill pay, direct deposit
business in Health Care on Commercial, Small Busi-
generate new sources of fee of payroll), and provides
( Health Care revenues have ness and Retail. Building
income. better information manage-
grown at an 18% CAGR over better Treasury Manage-
ment.
How will you compete? Very the last six years! ), Govern- ment products to meet
few banks are looking at non- mental Agencies and Middle Small Business and Middle Do your people have the
owner occupied commercial Market companies. Aggres- Market needs. Hired a knowledge they need to sell
real estate, the broken engine sive cross sell to existing cus- number of Small Business these services? The needs of
that drove so much growth. tomers. Will do select CRE. lenders. Expect to hire operating companies are very
Many banks are looking to more. different than that of Com-
5/3: Expand underpenetrat-
SBA loans as a mechanism to mercial Real Estate entities.
ed areas; Small Business, Pri- Looking ahead, Is your bank
provide protection via guaran- Now is the time to refresh
vate Banking, Treasury Man- valuing your core deposits
ty or a reduced loan to value. their knowledge.
agement. Want a higher de- as much as it should? Or,
That makes sense. Of course,
posit level per branch and are you spoiled because of The Competition will bundle
Health Care is seen by many
better cross sell. Hope to today’s extremely low fund- solutions and you should too!
as a segment that bears less
maintain pricing discipline in ing costs? Many banks are Understand the operational
risk, if properly underwritten.
Commercial. Have averaged focused on offering the cus- cash flows of the prospective
Out of curiosity, and in an Libor + 400 bps. tomer great Treasury Man- business and offer solutions
effort to garner some infor- agement products that will that save time, money, FTE ,
Comerica: Emphasis on de-
mation about competitor’s solve customer problems or increase convenience.
posit rich segments. Selling
plans, I reviewed the Investor while providing the bank You may not have every bell
card programs to Govern-
Presentations of a number of with either annuity fee in- or whistle, but sell solutions,
ment Agencies. Want Small
Regional, Super Regional and come or increased core provide great service and in-
Business, Technology, Life
National Banks. While Com- deposits. When rates rise, crease your share of the mar-
Sciences, Energy, Auto Deal-
munity Banks don’t compete they will maintain low cost ket.
ers and Wealth Management.
with many segments of those funding sources tied to
Mostly floating rate.
larger banks, we do compete their Treasury Manage-
for retail deposits and we Huntington: Will lead with ment solutions.
compete aggressively with the Treasury Management. Want
Another common direction
small business lending groups to double Treasury Manage-
is the targeting of relatively
of those banks. Here are ment fee income as a percent
stable , cash rich industries.
some of the things I see those of C & I loans in 2-3 years.
In particular, Health Care is
banks telling the investment Targeting Not-for-Profit,
on everyone’s radar.