Fleet Financial Group has made small-business lending a focal point of its strategy, president Robert Higgins says.

The bank has moved the operation, which last year contributed 20% of Fleet's $1.3 billion in net income, out of the retail bank and into a separate unit under Mr. Higgins' direct command.

With a stand-alone business unit, "you can see customer patterns and start to understand delivery channels," Mr. Higgins told attendees at the American Banker small-business conference last week. "We got a clearer view of what this was."

Fleet plans to boost small businesses' contribution to overall profits by at least 10% this year, using new products and services and a redesign of 350 of its 1,200 branches.

"There is no area fraught with more potential," he said.

Fleet's 400,000 small-business customers have taken out some $4 billion in loans. The $100 billion-asset company, based in Boston, is the leading small-business lender in New England, according to the Small Business Administration.

Fleet spent $5 million this year on training employees to handle small- business needs. The employees work in the revamped branches, in areas where small businesses are concentrated.

After eight months, the restructured branches are getting good customer reviews. About 60% of Fleet's loan growth comes from the specialized offices, where deposits are up and the number of money market checking accounts has doubled, Mr. Higgins said.

In the past year, Fleet has launched products and services such as "storefronts fleet"-software that lets businesses sell their products on the Internet-and a call center that takes inquiries solely from small- business customers.

Mr. Higgins said the company is researching a product that would help small businesses set up their own 401(k) plans.

Though much of the business that Fleet has added in the past six months is from older clients, the company is gaining customers in New York and New Jersey, where it lags Chase Manhattan Corp., Mr. Higgins said.

"We're seeing what it's like to not be the dominant player," he said.

Fleet's special attention to its small-business line makes sense because those customers tend to be most profitable for banks, said Anthony J. Polini, an analyst at Advest Group.

"Upgrading the level of service works," he said. "It's like traveling first class. Customers like that."

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