Aiming to attract customers who are unhappy with the rush of bank mergers, Sanwa Bank California is offering certain banking services free of charge for the next three years.
The $8 billion-asset bank this week kicked off a program under which new customers can trade in checkbooks from their current bank for Sanwa's so-called "2001 Banking" package, which saves customers a total of $300 in fees over the duration of the program.
The bank is offering free checking and savings accounts, check-image statements, overdraft protection, and on-line banking through March 2001. In addition, new customers will receive one set of free checks and six months of complimentary on-line bill payment, which usually costs $5.95 a month.
"We're looking to differentiate our product from all the other free checking offers that are available," said Gwen L. Thomas, Sanwa vice president and senior product manager. "And, given the heightened awareness consumers have about mergers, we're trying to appeal to those who are looking for stability."
Sanwa, as well as other small regional and community banks in the West, is hoping to reel in customers stung by rising fees or the decrease in personalized service that often comes with mergers.
The West Coast has seen more than its share of consolidation in the past few months. Most recently, San Francisco-based BankAmerica Corp. agreed to merge with NationsBank Corp. of Charlotte, N.C., in a $60 billion deal. In March, Washington Mutual Inc., Seattle, announced its proposed $9.9 billion acquisition of H.F. Ahmanson & Co., Irwindale, Calif. And in February, Glendale (Calif.) Federal Bank unveiled plans to merge with San Francisco's California Federal Bank.
Though the mergers may not spark widespread consumer dissatisfaction, they often give customers a good excuse to think twice about where they bank, said James R. Bradshaw, an analyst with Pacific Crest Securities, Portland, Ore.
"Mergers cause customers to reevaluate their banking relationship and go talk to other banks," Mr. Bradshaw said. "It's a great opportunity for a non-household name like Sanwa to build recognition and grab a bigger piece of the market."
Under the Sanwa offer, customers initially must deposit $100 to open a new checking account. To open a fee-free savings account, customers must transfer $25 from the new checking account.
The Los Angeles-based bank, which is owned by Sanwa Bank Ltd. of Japan, expects to attract 5,200 new customers - a 2% increase in its depositor base - through July 3, when the offer closes.
While Ms. Thomas acknowledged the offer would take a bite out of fee income, she added that the increased balances are expected to easily counteract those losses.
To promote the program, Sanwa will begin a radio and print advertising campaign later this month. The free services are already being advertised on Sanwa automated teller machines. In addition, Sanwa customers who do not have a checking relationship with the bank are being plied with statement inserts and in-branch posters and brochures.
"We are looking to establish a more complete, one-stop-shopping relationship," Ms. Thomas said.
