About 800 bankers from Chase Manhattan Corp. attended a raucous morning pep rally this week, part of a five-state commercial lending blitz.
After a high-energy motivational session at the company's Park Avenue headquarters, loan officers-including some high-ranking executives-fanned out to visit 3,500 current and prospective middle-market customers in New York, Massachusetts, Pennsylvania, Ohio, and Texas.
Such tactics are common as banks try to keep competitors from poaching their customers.
The annual event at Chase began in 1991, after predecessor Chemical Banking Corp. merged with Manufacturers Hanover Corp.
"We were concerned that our competitors would go after our accounts, so we decided to go after theirs," said Frank Lourenso, executive vice president and head of Chase's middle-market group.
The annual rally is meant to fortify Chase's position as the No. 1 middle-market lender in the New York area. The company has ties to 65% of the region's midsize companies with annual sales of $3 million to $500 million.
Some competitors, however, dismissed the effort as a gimmick.
"They're defending themselves," said John Simons, a former Chase banker who is now executive vice president and head of New York middle-market and corporate banking for Fleet Financial Group. "No one wants to bank with just Chase."
He did acknowledge some benefits, however. "It gets the group really charged up (and) focused," he said.
According to a study commissioned by Chase, Citigroup's Citibank unit ranks second in the region, with 33% of the market; Bank of New York Co. and Fleet are tied for third, at 31%, and Merrill Lynch & Co. is fourth, with 27%.
Middle-market customers increasingly want capital markets services, such as high-yield debt and merger advice, Mr. Lourenso said. "Credit still drives most of the business," he said. "But with so much money in the market, these customers are looking to sell their companies or do alternative financing."
Chase is drawing some of this business. Last year the $361 billion-asset company ranked 9th in transactions for firms with a market capitalization of $100 million to $500 million, with six deals worth a total $2.8 billion, according to Securities Data Co. Year-to-date, Chase ranks fourth, with six deals, worth $4.4 billion.
A year ago Chase customer Jockey was looking for a licensee to manufacture its sports apparel. Chase bankers introduced Jockey to Jacques Moret, a bank client that manufactures exercise gear, and a licensing arrangement quickly followed.
After Wednesday's pep rally, Mr. Lourenso popped into family-owned Jacques Moret to discuss insurance and private banking needs. Chase already provides cash management services to the firm.
Afterward, the banker stopped by Hampton Industries Inc., a publicly traded maker of men's shirts and casual apparel. Hampton, a new customer, just agreed to a $100 million revolving credit with Chase.
"I like the old-fashioned banking approach," said David Fuchs, Hampton's chairman and chief executive officer. "We want a bank that becomes a financial adviser to us."
