2 Specialty Banks Vying For the Affluent in Chicago

Everyone seems to want a piece of the private banking market in Chicago.

Continental Bank Corp. is revamping its private banking business, Swiss Bank Corp. plans to serve affluent individuals in the city, and now two boutique banks have entered the fray.

"I do think there are going to be more niche banks opening," said Ralph Mandell, cochairman of Chicago's PrivateBank and Trust Co., a bank devoted to the upscale market that opened in February. "I think then you get into what banking is all about."

The other specialty bank targeting the affluent is Biltmore Investors Bank, located in the exclusive northern suburb of Lake Forest, Biltmore, which opened in July, is a subsidiary of Johnson International, a financial holding company owned by the family that controls S.C. Johnson Wax.

Both boutique banks hope to cash in on a demographic trend. First Boston Corp. and National Planning Data Corp. predict that Metropolitan Chicago will be the 15th-best market for private banking in 1995.

At the fledgling PrivateBank, all clients work with at least two of the seven managing directors, Mr. Mandell said. Such intimacy is a key selling point.

Mr. Mandell and William Langley, also cochairman, decided on the specialty concept after Oak Park Trust & Savings Bank, which they ran, was sold to First Chicago Corp. in 1987. "This is a business that we knew and liked," Mr. Mandell said.

3 Executives Own 13%

Caren Reed, a former Continental executive, serves as president of the bank. Combined, the three top executives own 13% of the institution.

"I think it's an interesting concept," said Wilma Smelcer, head of private banking at Continental. "They have an opportunity."

The challenge, Ms. Smelcer said, will be for the small institution - capitalized at $9 million - to build its name and client base.

PrivateBank received permission two weeks ago to begin trust activities, and it plans to expand into a full-service boutique bank for the city's professionals, entrepreneurs, and retirees. It will sign contracts with other companies for portfolio management but will set investment criteria, work with clients, and monitor portfolios.

Though the bank is reluctant to set minimum investment requirements, it is targeting clients who have at least $1 million in investable assets.

The bank, which now has $25 million in deposits, hopes to grow to $100 million in deposits by the end of 1992.

Biltmore, initially capitalized at $7.5 million, was formed when Johnson International acquired the Illinois charter of Magna Bank of New Holland.

Its hometown, Lake Forest, "has a high number of professionals, executives, and entrepreneurs," said Lawrence Loeser, Biltmore's executive vice president.

The bank's only requirement is that individuals maintain at least $1,500 in a checking account, but it is targeting affluent individuals. By yearend, bank officials hope to have $12 million in deposits.

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