Taking a page out of the big-bank playbook, Hibernia National Bank in New Orleans will soon offer instant loans online to its small-business borrowers.
The $15.7 billion-asset Hibernia Corp. subsidiary plans to make loans online through an agreement with LiveCapital Inc. of San Mateo, Calif. Large national companies such as First Union Corp. and Citigroup Inc. have been using LiveCapital's Lending Direct software for several years, but Hibernia is the first bank in Louisiana to offer the service, said Mike Grossman, chief executive officer at LiveCapital.
Hibernia has rolled out several technology initiatives this summer in its attempt to dominate the local small-business market. By far the state's leading bank lender to small businesses, it is trying to court more of them with a blend of high-touch service and state-of-the-art convenience.
"We really see small business as an integral part of our company," said Bob Kottler, Hibernia's executive vice president of retail and small-business banking. "We see this as our continuing effort to understand how to use the Internet to take care of small-business customers."
That effort began in June, when Hibernia introduced a service that lets clients with sales of less than $10 million set up their own Web sites through the bank's site. The service, which costs as little as $19.95 a month, is aimed at business owners who lack the money or the time to hire a Web designer.
Two months ago Hibernia introduced Positive Pay, developed by IPS of Boston, to help protect its business clients from check fraud. Marsha Montgomery, Hibernia's executive vice president of treasury management, explained that a business can now give the bank a list of its issued checks, and when the checks come in, Positive Pay compares them to the business' list. If any discrepancies arise, the check is not cashed and the business is immediately informed.
Hibernia began actively going after small-business customers in December 1993. It had about 1,000 of the then; now it has more than 50,000, Mr. Kottler said.
As of June 30, Hibernia had $808 billion of outstanding Louisiana small-business loans - defined as commercial and industrial loans valued at less than $1 million - according to Veribanc Inc. in Wakefield, Mass. That's nearly twice the volume of its closest pursuer, Bank One Corp. of Chicago.
Bank One gained most of its market share through its 1998 acquisition of First Commerce Corp. in New Orleans. Michael Granger, an analyst with J.P. Morgan Securities in New York, said that deal created even more opportunity for Hibernia with customers reluctant to bank with an out-of-town institution.
By improving its services, especially Internet offerings, Hibernia is sending a message to other Louisiana banks, Mr. Granger added.
"They are doing a great job focusing in on a different customer segment and specifically in the business segment," he said. "A combination of that approach and the Bank One deal has allowed them to take a fair amount of the market."