Popular Inc. of San Juan, Puerto Rico, said it plans to roll out direct banking in the third quarter under two brand names: its own and that of E-Loan Inc., the online loan company it bought last year.
Richard L. Carrion, the $48.6 billion-asset Popular's chairman, said in an interview Friday that his company will offer direct banking, in addition to the online banking service it offers in Puerto Rico and on the mainland United States, to gather deposits.
"A lot of banks are doing this as a simple way to raise deposits," Mr. Carrion said. "We know we can make loans over the Internet, so we should be able to raise deposits over the Internet."
Popular's plan would follow similar moves by the Dutch banking company ING Group NV, which operates ING Direct, and Private Bank and Trust Corp., which started EmigrantDirect in January.
Washington Mutual Inc. said in November that it had begun testing its Wamu Direct service, but the thrift company has not launched a direct banking operation.
Mr. Carrion said that there is room for more direct banks, and that by purchasing E-Loan, Popular is already farther along than most in that market.
Both brands will run on the same platform, but Popular wanted to maintain the E-Loan brand because it is well known, he said.
Popular will also continue to offer loans through E-Loan.
Mr. Carrion did not say what interest rate his company would offer customers, or how many deposits it expects to gather. He did say his company would be "as aggressive as we need to be" to compete. However, rates are not the only way to compete, he said. "You can win with ease of use," and user-friendliness and product offerings will be important factors for Popular.
