BayBanks and Marine Midland Open Offices in Inner-City Boston, South

In another sign that banks are returning to low-income and minority communities, two big ones have opened facilities in inner-city neighborhoods.

BayBanks Inc., with $11 billion in assets, last week opened the first full-service branch in South Boston in more than 30 years. And on Monday, Marine Midland Bank, an HSBC Holdings PLC unit with $19 billion in assets, opened a loan production office in the South Bronx.

In the last two months, several other banks have opened facilities in inner-city neighborhoods, including Chase Manhattan Corp., which opened a minibranch in New York City's Harlem neighborhood, and Natwest, which opened a branch in the South Bronx.

"The opening of the new BayBank branch in the South End is a landmark event for the residents and businesses throughout the area," said Richard F. Pollard, president of BayBanks Boston. "We are committed to being a good neighbor."

Mr. Pollard said he believes the recent wave of inner-city branch opening shows that the "tide has turned" on bank disinvestment in urban areas.

"Banks have now realized that this is a profitable venture," he said. "A bank's customers were in these neighborhoods, and they were being underserved."

Martin Liebman, New York regional president of Marine Midland Bank, said its new office demonstrated its commitment to a "slow but steady" expansion throughout the New York City market.

The Bronx office will include four full-time employees - two small business loan specialists, a home mortgage expert, and a consumer products person who will handle credit cards and home equity loans.

Community activists cautioned the public against giving the new branch openings too much significance. "You got to be careful about predicting overarching trends," said Allen Fishbein, general counsel to the Center for Community Change. "I haven't seen any data to suggest nationwide that there is increased evidence that more openings are occurring."

Mr. Fishbein noted that the BayBank expansion came in response to a five-year Community Reinvestment Act agreement the bank made with local groups.

But he said individual banks are returning to some inner-city areas. Mr. Fishbein said he expected other banks will follow.

The BayBank branch, which opened Sept. 14, is part of the bank's Neighborhood Banking program, which brings low-rate home improvement and mortgage loans as well as small business financing to inner-city areas.

BayBanks has opened seven branches and 35 ATMs in urban neighborhoods in the last six years.

"The opening of the BayBank branch is great for everyone involved," Boston Mayor Thomas M. Menino said in a speech. BayBank gets to enter a new market and the neighborhood gets a new bank, he declared.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER