Mellon Testing On-Line System To Attract Midsize Companies

Mellon Bank Corp. is using the Internet to sell its services to middle- market corporations.

The Pittsburgh-based banking company this month began a Maryland pilot of Business Builder, an Internet program designed to attract customers on- line, said Jeffrey L. Leininger, a vice chairman. The pilot is being conducted by Mellon Bank Maryland.

"We began by simply putting a billboard out on the Internet advertising what our capabilities were, what our products were, and what kind of companies we're interested in doing business with," Mr. Leininger said.

The site includes a customer questionnaire and the name of a contact so prospects can touch base with a "live person," he added.

The bank's efforts have borne fruit, Mr. Leininger said last week at the annual banking symposium sponsored by the Bank and Financial Analysts Association in New York. Two weeks ago Mellon received an inquiry from a $200 million marketing and advertising company based in Philadelphia.

"They're not a customer of ours," he added. "They're in our backyard. They're a customer of one of our competitors."

Both Mr. Leininger and Frank V. Cahouet, Mellon's chairman, president, and chief executive officer, who also spoke at the conference, emphasized that the program is still in test-phase.

"We're doing a controlled experiment in a particular area where we have name recognition," Mr. Cahouet said. The bank wants to determine whether the Internet is a valid way of reaching additional customers, he said.

"We're not sure exactly where this is going to lead us," Mr. Leininger said.

Mellon is also embarking on a number of other strategies in the middle market, including an effort to reach the large concentration of government contractors in Maryland, said Mr. Leininger.

And Mellon is continuing to remain active throughout the rest of the Middle Atlantic region, Mr. Leininger said.

But Mellon's middle-market business is not restricted to the Middle Atlantic states. In January the company bought $1 billion-asset 1st Business Bank, Los Angeles, which focuses exclusively on middle-market companies.

Mellon 1st Business Bank "is an important distribution platform that we didn't have in Southern California," Mr. Leininger said.

Mellon does business with 500 middle-market corporations, which account for roughly $2.5 billion in loans outstanding, he said. Mellon defines the middle market as companies with annual sales of $20 million to $500 million.

The company will also look to the West Coast to expand its presence in the national loan syndication market, said Mr. Leininger. Mellon plans to open an account management office in Los Angeles later this year, he added.

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