One-time outcasts turn into strengths

BANKING & FINANCE

May 20, 1994|By David Conn | David Conn,Sun Staff Writer

As recently as three or four years ago, community development bankers were the outcasts of commercial banking. They were the ones hired to polish the company's reputation and keep the regulators at bay while the commercial bankers made the "real" loans.

Now, community lending has begun to come into its own. And the 140 or so people attending the fifth annual Community Development Lending Conference at the Hyatt Regency hotel here yesterday and today were proof of that.

That's Mike Mantle's outlook, anyway. Mr. Mantle, president of Bank of America's community development bank, is chairman of the American Bankers Association committee that organized the national conference.

"The majority of the initial emphasis to get into this business was driven by the CRA," he said. The federal Community Reinvestment Act requires lenders to make credit available to all segments of the markets they serve.

But lately banks have come to realize that lending to minority and low-income communities actually can be profitable. "Now I think the driving force is the competition among the banks," Mr. Mantle said. "I think the competitive juices are really flowing."

Baltimore was chosen as host city this year because "we thought that Baltimore had a number of examples of private-public partnerships," Mr. Mantle said. Groups attending the conference have toured the Sandtown-Winchester neighborhood and the Nehemiah housing project, he noted.

"Baltimore is a success story. Plus, it has the Enterprise Foundation, which is a a national leader in this business, and it has the Development Training Institute, which is a national leader."

Today's agenda includes sessions on commercial real estate; single-family loan programs; and an intriguing little program called "Lessons Learned: How to Stay Out of Trouble."

Signet Bank cuts investment division

The investment banking division of Richmond-based Signet Banking Corp., which once had as many as 10 professionals, is now down to four. The imminent departure of Chris Royston, who runs the division's Baltimore office, will leave only three.

And the fate of those three survivors isn't clear.

The shrinkage was not by coincidence, the company said. "The division has looked internally in terms of how to control expenses, and has decided to 'reengineer' itself and to consolidate investment banking with the money center division in Richmond," said spokeswoman Gail Sanders.

Mr. Royston decided to leave the company rather than move to Richmond, Ms. Sanders said. He could not be reached for comment.

The consolidation could bring "certain synergies" because the money center deals with short-term securities while investment banking handles longer-term financing, including senior debt and equity, Ms. Sanders explained.

Others saw a broader explanation. Some feel the decision to effectively end the investment banking group is yet another sign that Signet is trimming down in preparation of a spinoff of the bank from its credit card operation, which generates the majority of the company's profits.

According to Ms. Sanders, "there's been no decision at this time on any of that."

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