Florida Bankers Have Little Appetite for Foreign Lending
ST. PETERSBURG, Fla. -- To officials in Florida government, international trade has always held the same magic allure that a World Series crown has to George Steinbrenner.
They appoint committees to talk about it, stage conventions to promote it, and tell anyone within listening range that international trade is destined to become bigger than Mickey Mouse in the Sunshine State one day.
Funny thing, but Florida bankers don't seem to believe it.
Even as government officials tout the fact that one out of 10 companies in the state is involved in some form of foreign trade, most of the Florida banks shy away from international banking. In fact, they have the same reaction to it that a classical musician might have to a Def Leppard recording.
"I don't think any of the Florida banks have more than a nickel's worth of international business," said B.J. Walker, chief executive officer of Atlantic Bancorp., a Jacksonville-based bank with $32.5 billion in assets.
Hyperbole obviously, but still an indication of Florida bankers' traditional reluctance to get involved in international banking, especially foreign lending.
That reluctance became more pronounced as news of debt problems in lesser developed countries began to spread several years ago. Since then, the major Florida banks have engaged almost exclusively in trade financing. That translate to a "back to the basics" approach whose emphasis includes letters of credit, offshore collection for domestic clients, wire transfers, and foreign exchange.
"Our appetite for foreign lending has waned," said Doug Mrstik, vice president and manager of the internal division for NCNB National Bank of Florida in Tampa.
"The majority of our business involves letters of credit, confirming credits for our domestic customers given by foreign banks, etc. It's really designed to help our existing customers, rather than generate a lot of offshore business."
Augmenting Corporate Relationships
Pretty mundane stuff, to be sure, but something that can be vital in building a strong commercial banking relationship with a major corporate client. Most Florida banks now use international banking services as a way to augment thier relationship with corporate customers.
The reason can be found in the changing nature of Florida business. True to the declaration of commerce officials here, more and more companies in Florida are doing international trade. No longer is this simply the domain of southg Florida companies doing business in Latin America. The so-called international companies are spread all over the state. Many of them never dreamed of doing any offshore business before.
Take a tool distributor in Jacksonville who discovers that he can get cheaper products in Taiwan. Or the farmer who realizes that the strong dollar means he can buy more equipment in Japan than he can in the United States for the same amount.
Suddenly, these companies need international banking services.
"Our figures show that our customers want to do their international banking with their lead bank," said Ben Turnbull, senior vice president of Barnett Banks of Florida Inc.'s international division in Jacksonville. "Our surveys also show that they were not getting these services from Barnett."
As a result, Barnett has begun to expand its innternational banking operations. Not only is it hiring more personnel, it is aggressively expanding its network of correspondent banks in Latin America, Asia, and Europe. And it is working hard to promote the service with Florida customers.
"We felt it was vital to expand and deliver high-quality basic international services to Florida corporations," says Mr. Turnbull, who came to Barnett last November From Citizens and Southern Georgia Corp. "Over the last few years, Barnett has made a very aggressive effort to do more corporate banking. …