BILL GLASSFORD IS A man who enjoys a good challenge. And now he's got one.
In June 1992, West One Bancorp asked Mr. Glassford to create an international banking unit from branches and assets the Boise, Idaho-based bank holding company acquired from Security Pacific Bank of Washington.
The assignment seemed daunting for a number of reasons. Not only did West One have little recognition in the international business community, it had no systems or procedures to support international operations.
In its 125-year-old history, West One maintained the stance of most bank holding companies, purposely avoiding foreign assets and operations.
Mr. Glassford took only three months, however, to lay the groundwork for a successful international banking shop, based at West One's Seattle affiliate.
"We were very, very lucky," said Mr. Glassford, senior vice president and manager of West One's international division.
The unit, he said, was profitable in its first month of operation, September 1992. Within three months, it was handling an average of 1,000 documentary transactions a month and receiving 2,000 international wire transfers a month.
It took more than luck, however, to create a successful international banking unit from scratch. Technology helped.
International trade finance, by its nature, is a paper-intensive operation. Issuing a letter of credit, for example, requires a constant shuffling of paper, as well as checking and double-checking documentation and other forms for accuracy. A single, small mistake can result in significant financial liability for the issuing bank. By automating the process, banks eliminate the potential for errors.
"You could not run anything other than the smallest international banking department without the computer systems to back it up," said Bernard Lunn, senior vice president of Kapiti, a New York-based supplier of banking software.
When Mr. Glassford set to work staffing and procuring hardware and software to support West One's new operation, he didn't have to look very far. The staffers he picked were mostly former colleagues, either from Security Pacific, where he had worked prior to joining West One, or from Rainier Bank, for which he worked prior to its 1989 takeover by Security Pacific.
The software that was chosen consisted of two Kapiti systems Mr. Glassford and his colleagues had used in the past. one automated the letter of credit process while the other automated foreign exchange operations. West One runs both systems on an IBM AS/ 400 midrange computer.
"We knew [the software] worked well and we liked it," said Mr. Glassford.
And, Mr. Glassford suggested, had the bank's staff been forced to learn the nuances of both new hardware and new software systems, it never would have been able to accomplish a seamless transition of customers from a Security Pacific to a West One shop.
"When West One bought the Security Pacific portfolio we had to convince customers that business would continue as usual. We didn't want them to see a diminution of service," explained Mr. Glassford.
The total cost of setting up West One's international shop -- hardware and software combined -- was about $1 million.
But the return on investment is considerable. In addition to being in a position to better meet its customers' foreign trade needs, West One also gains an opportunity to better manage its capital.
Take letters of credit. Although these instruments are a form of lending, they are considered more secure than traditional loans because they are backed by specific import or export products. Consequently, the capital allocation required by regulators is less for letters of credit than if the same money were lent outright to a company for a domestic project.
"It's a selling point to senior management," said Bob Frank, a former international banker who is senior vice president at the New York consulting firm New Alliance Corp.
To increase revenue from the international trade business, Mr. Glassford has begun actively pursuing correspondent relationships with banks in the Far East. "I can't do enough of that," he said.
The process of building correspondent relationships was particularly difficult at first because of West One's Boise home base, Mr. Glassford conceded.
"It doesn't create a lot of comfort for someone in Bangkok," he said.
Nevertheless, the effort has met with success; at last count West One had correspondent relationships with about 1,000 overseas bank offices.
West One currently focuses on four lines of business with its international division: letters of credit, foreign exchange trading, international business banking, and international services. Two of those business lines are geared toward generating profits: FX trading and international business banking. The other two lines of business are designed more as support functions, Mr. Glassford said.
Today, the lion's share of West One's international business is handled out of the $1.5 billion-asset West One Bank Washington. But plans already are in the works to extend international capabilities to units in Idaho, Oregon, and Utah.
"We're hoping to give them more tools with which to go after their markets," said Mr. Glassford.
As for the Washington bank, Mr. Glassford is eager to expand its international product offerings. Plans now on the drawing board include foreign-student banking services and Vietnamese remittances.
"I've got 100 ideas, I just don't have the time to go after them all," he said.
But given the opportunity, Mr. Glassford likely will implement many of the ideas he now has percolating.
"In this job I've been able to shape the direction of the bank," he said.