Banco Popular, the largest bank and credit card issuer in Puerto Rico, is making a mark on the U.S. mainland.

As competition heats up for the potentially lucrative Hispanic market segment-projected to be 25% of the U.S. population by 2000-Banco Popular feels it has a leg up.

"We have an understanding of the language and culture, and targeting the Hispanic consumer is what we do for a living," said Donald R. Simanoff, president of the bank's U.S. card division, based in Orlando. He joined the bank in January 1997 from Barnett Banks Inc. when plans were being hatched to take the card business to the mainland.

In the year Banco Popular has been in the U.S. market, it has garnered nearly 150,000 accounts, 25% of them secured cards.

In June, Banco Popular hired Don Francisco, a Spanish-language television personality, to pitch its cards.

Mr. Simanoff said the advertising attracts mostly secured accounts, with credit lines collateralized by deposits, though direct-mail appeals bring in mostly unsecured accounts.

More recently, Banco Popular signed a cobranding deal with Heftel Broadcasting Co., Dallas, which owns 39 stations broadcasting Spanish- language programs.

Banco Popular's primary markets are the six states with the biggest Hispanic populations: New York, New Jersey, Texas, California, Florida, and Illinois. But its reach through television advertising is national. As Mr. Simanoff likes to point out, "our first U.S. card customer to sign up was from Kentucky."

"We spend a lot of money on publications," Mr. Simanoff said. These are needed to help educate the 50% or more of Hispanic consumers who have not established credit.

Still, Mr. Simanoff said, a misconception about this market is that most of it falls into the subprime category.

Though most of Banco Popular's U.S. card portfolio is unsecured, all its cards come with discounts for services traditionally associated with the unbanked consumer. Cardholders get discounts on Western Union money orders and purchases at Kmart pharmacies. In addition, the bank is negotiating to offer discounted long-distance calling.

Banco Popular's customer service staff, statements, and solicitations are in Spanish and English. The bank has discovered that many Spanish- speaking people read English better than Spanish and that 40% of people who call the bank prefer to speak in English.

Mr. Simanoff said he would consider issuing American Express cards if the Department of Justice wins its lawsuit against Visa U.S.A. and MasterCard International. The bank card associations' rules prevent such comarketing, but the government claims this violates antitrust law.

Banco Popular recently began issuing American Express in Puerto Rico, Mr. Simanoff said, "and the fact that we already have this relationship with American Express could be an advantage" if the bank were allowed to extend it in the United States.

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