Chemical Banking Corp. is gearing up services to California's wealthy with its first private banking branch in the state.
The New York-based bank has set up shop in Los Angeles through a branch that can take deposits from rich customers. Located in affluent Century City, the branch operates as Chemical Bank FSB, a subsidiary of the $171 billion-asset company.
Chemical has had a private banking presence in California for about eight years. But in the past, wealthy clients in California lacked the benefit of walking into a branch office and dealing directly with a private banking representative. As a result, Chemical felt it couldn't compete with many local banks.
The establishment of a branch for private banking services will allow California customers with upwards of $5 million to deposit money locally. In addition, the branch offers lending, trust, estate planning, and investment management with the help of Van Deventer & Hoch, the bank's investment management affiliate.
The bank hopes to attract individual and corporate clients who do business on both the East and the West coasts.
But some say that Chemical is entering a market that is already well accounted for by other large banks.
"They're late to the game," said David Ross Palmer, a New York-based private banking consultant. "Unless they do something unusual they're going to have a hard time competing."
Mr. Palmer noted that California banks like Wells Fargo & Co. and BankAmerica Corp. in San Francisco have already cornered the private banking market in California and that even some of the big New York banks, such as Chase Manhattan Corp., have also joined in. U.S. Trust Co., for example, has had a private banking presence in California for about eight years, according to a spokesman.
Mr. Palmer did say that by having "full depository powers," which essentially allow the bank to take deposits, Chemical will be on equal grounds with the local banks.
And Chemical, with a century of private banking under its belt, is betting that the new office, staffed by 20 people, will offer the kind of personalized service that wealthy customers will want, according to a spokesman.
"California has an enormous population of wealthy individuals," said Perry W. Wilder, a Chemical Bank vice president who heads the new office. "There is plenty of wealth to go around."