After 18 months of reorganizing its business lines, SunTrust Banks Inc. has adopted a new sales culture, officials said.
As a result, the bank said, employees generated more referrals for trust and investment services in the first two-and-a-half months of this year than in all of 1996.
But SunTrust's new emphasis on sales is somewhat behind other regional bank efforts, analysts said.
To compensate, the $52.5 billion-asset company has spent the last 18 months trying to reinvigorate six key business lines in order to boost long-term growth. Operations that went through the overhaul included credit cards, mortgages, commercial banking, corporate banking, and retail.
"It's the classic banking industry move to a sales culture," says L. Phillip Humann, SunTrust president.
The company has declined to identify the investment associated with the changes, which have involved technology enhancements, personnel changes, and sales-oriented incentive programs. But company officials said the first quarter of 1997 will mark the end of the investment. Analysts said they are now expecting to see tangible gains.
"The recent results have been impressive," said Darren R. Short, an analyst with the Robinson-Humphrey Co. "This is an old dog, but in a lot of respects they are attempting to teach themselves some new tricks."
Through the process, SunTrust said it has turned over hundreds of staff, eliminating some and redeploying others. In their places, the company has hired 1,000 new employees and is still working to find another 500, primarily to strengthen personal banking.
Though he said all areas have improved, two of the greatest successes stemming from the growth project have been in the mortgage and bank card areas, according to Mr. Humann.
By taking such basic steps as asking for business referrals from realtors and builders, the banking company said it doubled its mortgage origination market share in Atlanta from 4% to 8% last year, and boosted total originations from about $2.8 billion to $3.4 billion, said Mr. Humann.
"We hardly were in the mortgage business before," he said. "We relied on referrals from our branches, that's all we did. You can't just rely on your branches for everything."
The bank card program is another area Mr. Humann counts as a success, although he acknowledged an early effort marketing an affinity card with the Professional Golf Association flopped. He blames the third-party contractor who orchestrated the direct-mail marketing effort for the failure.
"We found out after the fact that they were targeting a lot of nongolfers," he said wryly. Still, the effort generated 12,000 new accounts.
A series of country music award cards generated nearly double that, he noted, and a new card aimed at Daytona car racing fans was issued last July.
Overall, new bank card accounts grew 66% in 1996 and receivables were up 25%, company officials said.
Still, SunTrust estimates only 30% of its customer base has a SunTrust bank card. Moreover, many of those who have the card don't use it-something the company is trying to change with a direct-mail program to current cardholders.
"We used to sell our bank card as an afterthought. But we decided we don't want this to be a step-child," said Mr. Humann. "There is a big opportunity there."
Indeed, more work needs to be done. SunTrust is still examining how it can streamline its nine telebanking centers into a more efficient model of one to three centers. And, although it is reluctant to dive into insurance product sales, the company is studying whether to market insurance to affluent individuals and small businesses.
It also is in the midst of an aggressive drive to develop an in-store branching franchise. After opening 30 in-store branches in 1996, the company has another 30 planned this year.
Analysts said they thought SunTrust could be getting more out of its Florida and Georgia franchises. They complained about the high cost and bureaucracy created by the company's decentralized structure, which includes 29 independent bank chief executive officers and 29 boards of directors.
"I don't know if the management style works particularly well," said R. Harold Schroeder, an analyst with Keefe, Bruyette & Woods Inc. "SunTrust operates in some very attractive markets where the competition is very strong. It remains to be seen as to whether or not SunTrust is up to the competition."
Mr. Humann said he is not deterred.
"If you're a shareholder you love us because you are sleeping very well at night," he said. "We're not trying to be everything to everyone. We're down here sticking to our knitting."
