Magazine article American Banker

Small Banks in Northwest Getting into Trade Finance

Magazine article American Banker

Small Banks in Northwest Getting into Trade Finance

Article excerpt

More small banks in the Pacific Northwest are setting up foreign trade divisions to serve the Asians pouring into the region.

Last month the $2.9 billion-asset Banner Bank in Walla Walla, Wash., launched an international banking department run by two former managers of Washington Mutual Inc.'s now-defunct commercial unit.

The department is issuing international letters of credit in-house and will soon offer trade financing, currency exchange, and wire transfers, said D. Michael Jones, the president and chief executive of Banner Corp., the bank's holding company.

Banner used to outsource such services to bigger banks, he said, but as customer inquiries increased it saw an opportunity.

"A lot of small companies don't like dealing with large banks, because their trade finance offices are in Los Angeles or San Francisco," Mr. Jones said. "They are much more comfortable talking to someone locally who has the expertise to help them, so that they know it's going to get done right."

Banner did not get into the business just for the fee income, he said -- it also wants the new customers' checking and line-of-credit business.

Big banks and those that cater to Asian-Americans in the Northwest have long provided trade finance services. The handful of community banks that have entered the market in the last few years include the $2.2 billion-asset Columbia Banking System Inc. in Tacoma and two in Spokane: the privately held Washington Trust Bank, which has $2.5 billion of assets, and Sterling Financial Corp., which has the $6.9 billion.

Warren Gross, the president of the Export Finance Assistance Center of Washington, said community banks are getting involved because about 4,000 small businesses in the region now trade overseas, far more than a decade ago.

Immigration is driving the trend. …

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