FirstBank Puerto Rico is looking to triple its market share of small- and mid-sized business customers over the next five years from its current 12 percent through an aggressive campaign and revamped platform catering to the segment often tagged as the motor of the island’s economy.
To get there, the bank is boosting the number of staff assigned to the segment handled through its commercial banking division, as well as renew the deposit, credit and transaction options provided to that customer base, Ginoris López-Lay, executive vice president of FirstBank told News is my Business.
“We’ve been serving this segment for a long time, seven or eight years, but now we’re renovating our strategy to place greater emphasis on that area to help it grow and become bigger than what it is,” she said, noting that the goal is to raise its participation in the small- and mid-sized business customer portfolio to about 36 percent by 2016.
The small and mid-sized business segment, she acknowledged, offers ample opportunity for growth, given there are about 120,000 of them on the island.
“This segment is key to the economy’s growth and it is a major segment, when you consider that the large corporate banking universe is probably made up by 200 to 500 clients, versus small and mid-sized businesses, of which there are thousands,” López-Lay said. “When you look at the corporate banking segment, FirstBank is in a leading position, with 30 percent of the market share.”
So far, FirstBank has been conservative in terms of investing in products and services catering to that smaller business. However, in recent months, the bank has been reinforcing its distribution channels as well as its product and investment platforms to be able to offer additional services both at the branches as well as online.
“Since establishing our commercial banking division, we set up a network of regional offices to offer personalized services and attention. Now, after recapitalizing the bank, we’re betting on this segment, which has a high potential for growth and to contribute to our economy,” the executive noted.
The new structure entails focusing some 25 dedicated bank employees on offering one-on-one attention to small- and mid-sized entrepreneurs with specific issues such as credit analysis, new business development and guaranteed loans through the U.S. Small Business Administration.
Last year, FirstBank generated $2.3 billion in loans, of which $70 million were granted to small- and mid-sized businesses, López-Lay said.
“That’s not representative of what we want to do now. During a peak year, we lent the segment as much as $100 million. The last time that happened was in 2006, and that’s what we’re reaching for within five years,” she said.
Branches are key
“The branches have become an important extension of what we do for that small client whose business generates $250,000 or less,” said Aysha Issa, senior vice president of business and retail banking, noting that new accounts were up 98 percent year-over-year in February.
Furthermore, she said “point-of-sale” system adoptions — or the devices businesses use to accept payment — were also up 20 percent during the same month, versus the prior year.
“The activity is happening, which is part of the focus and the strategy we have in place. We want to lead small businesses by the hand and orient them on the different options available to them,” Issa said.
As part of that informational campaign, FirstBank is launching its newest multimedia ad campaign today, under the slogan “Done successfully…Done with FirstBank.”