SAN FRANCISCO - Banks have long been accused of overlooking - or flatly ignoring - low-income people, minorities and women.

But with competition increasing, one inner-city banker argues that the time is ripe to pursue these markets.

"The new millennium will bring us unprecedented problems, challenges, and opportunities," said Emma Chapell, chief executive of United Bank of Philadelphia, in a speech Saturday at the American Bankers Association's annual convention.

"At United Bank we are shattering the old molds," she said. "We are concentrating on developing and serving these vitally new niches."

Ms. Chappell was the first African-American woman in more than 90 years to start a bank. United Bank, founded in 1992, has seven branches in the Philadelphia area, most of them bought from the Resolution Trust Corp.

United Bank's executives have become deeply involved in the city's minority business community and neighborhood organizations.

The creation of community development banks has helped meet some of the needs of underserved markets. But few such banks have been set up, and most are in metropolitan areas.

Community activists say traditional banks must to do more to identify and serve niche markets with special needs.

For nonminority banks, one growing method of targeting underserved markets through self-help programs for individuals or businesses.

"We like to be there from the beginning," said Janet Hurley, vice president of Annapolis (Md.) Bank and Trust, who attended the conference. "Several banks, attorneys and accountants in our community get together to present seminars for new and small businesses that help to inform them on topics such as how to obtain financing and how to write a business plan."

With the frenetic competition for traditional banking business, serving untapped and nascent markets becomes not only economically viable but imperative, Ms. Chapell said.

United Bank of Philadelphia specializes by reaching out to minorities. Its clientele is largely black, but the bank also serves Hispanics, as well as Koreans and other Far East demographic groups.

"We're filling a niche, assisting economic growth within the community," Ms. Chapell said. The bank is striving to be the center of its community, she said.

United Bank has performed fairly well for a young bank. It showed a profit 1993, its second year of existence, as it bulked up to almost $90 million of assets.

As for capital, the bank started with $6 million, from a 3,000-investor initial public offering in 1992. Capital now totals about $8 million, Ms. Chapell said.

But perhaps just as important for a start-up, United has made a name for itself, in Philadelphia and nationally.

United Bank underscores what James Baird, executive director of San Francisco's Bay Area Development Community, said is essential to the success of underserved markets and the banks that target them.

"We need financial institutions both to do well and to do good," he said.

Mr. Dietrich is a freelance writer based in Brookdale, Calif.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.