Richard C. Hartnack wants to keep things simple.

The vice chairman and chief of retail banking at San Francisco-based Union Bank of California does not worry much about providing the broader array of products and services that seem to preoccupy many of his peers these days.

Mr. Hartnack aims to beat his primary competition-Wells Fargo & Co. and BankAmerica Corp.-on basics like checking and savings.

"I'd like to be the very best provider of core products around, and if I'm not the category killer for the other stuff that's O.K.," he said in a recent interview.

If the traditional core of banking is what the third-largest commercial bank in California does best, the reasoning goes, that is where it will find its competitive advantage.

Mr. Hartnack, a 52-year-old California native, sees an analogy in department stores. They became popular in the 1950s because people began to value their time more and were looking for one-stop shopping. But eventually shoppers derived more value from specialty retailers.

"It's the natural evolution of good marketing by lots of people in a good economy," Mr. Hartnack said, arguing that the banking public has made the same shift.

"It frustrates the hell out of bankers, but I think it is a natural thing," he added.

"No management team has enough capital to develop a value proposition across all financial services and win, because too much brains and talent are arrayed against you in all of those categories. It is the ultimate conceit for people to think they can do that."

While Union Bank risks losing customers who want those fuller financial relationships with single institutions, its strategy fits with the prevailing thinking on core competencies.

"They know what they are good at and they are not going to kid themselves into doing something that isn't within their capability," says Charles B. Wendel, president of Financial Institutions Consulting in New York. "A lot of banks talk about the 'full relationship,' but if they don't have the products, resources, or capabilities, they really are just kidding themselves."

Mr. Hartnack said the payoff from his bank's focus is measured by the inflow of clients.

He said Union Bank snagged a substantial number of Wells Fargo customers who left after the institution acquired First Interstate Bancorp in 1996. Mr. Hartnack runs the community banking group out of Los Angeles, where First Interstate was based.

But even when Union merged with Bank of California to form the present institution in 1996, Mr. Hartnack was signing up new customers: The bank added about 100,000 that year, 75,000 the year before. The number for 1997 was roughly 50,000.

Customers were just about the only ones who didn't have a difficult time with the merger, quipped Mr. Hartnack, who joined the California bank from First National Bank of Chicago in 1991.

"Mergers are not fun deals, and mergers between equals are even less fun," Mr. Hartnack said. "We set a goal of not losing any customers, and it turned out there were a lot of customers who didn't even know we were in a merger."

At $30.6 billion of assets, the lead bank of Unionbancal Corp. ranks a distant third in California banking. But Mr. Hartnack insists that his institution is the perfect size to compete with BankAmerica and Wells. Union Bank has enough scale to invest in top technology yet is small enough to be nimble.

"There really isn't that much distance between me and the teller on the line, but we are big enough to offer the customer anything that the big guys can," he said.

Union Bank tries to create a "community bank feel" in branches and can react quickly to new market opportunities, according to senior vice president and director of marketing Nik Banerjee.

For example, the bank recently identified a potential demand for used- car loans in Southern California.

It put together a radio advertising campaign and saw instant results.

"We came in very quickly and got a huge lift," said Mr. Banerjee, who spent three years with BankAmerica before joining Union Bank last year. "We can translate a concept culled from our rather sophisticated data mining into action, rather than spending a year creating the grand plan."

The bank also has the resources to invest significantly in a sophisticated Internet banking product, one that Mr. Hartnack insists will outdo Wells Fargo's and BankAmerica's impressive Web sites.

"If this were up and running tomorrow, functionally it would be the most advanced site in banking," Mr. Hartnack said of a product scheduled to be showcased next month and ready for transactions in the fall.

"In a point-and-click environment, you will be able to do everything you'd be able to do in a branch or over the phone or on the PC, except hand us or get back coin and currency," Mr. Hartnack said.

Besides its size, observers say Union Bank has an advantage in not having a broad population of shareholders to keep happy. Bank of Tokyo- Mitsubishi Ltd.-at approximately $800 billion of assets the largest bank in the world-holds about 80% of the shares.

Union Bank's return on equity-15.97% last year-is "very respectable in the eye of their Japanese parent," says Campbell K. Chaney, an analyst with Sandler O'Neill & Partners in Walnut Creek, Calif. "Because they have to worry most about pleasing that one shareholder, they have the luxury to make longer-term investments, spend more time targeting certain customers, and cultivate and build client relationships."

BankAmerica and Wells Fargo, typical of the biggest U.S. holding companies, must focus more on near-term profitability hurdles and shareholder returns, Mr. Chaney says.

With the solid Japanese backing, Union Bank has been adding branches, another contrast to major peers, said Joseph K. Morford, an analyst with BT Alex. Brown in San Francisco. "They are filling in holes and picking spots where they can get a competitive advantage."

Over the past five years, Union Bank's California branch network grew by a net 26 locations.

But Mr. Hartnack is far from satisfied with the 237 branches Union Bank has across the state. He rattles off a handful of markets he wants to expand into: Monterey, Carmel, Santa Barbara, and more northern reaches along the coast.

"We only have three branches north of San Francisco," he said. And he spends "a lot of time worrying" about the San Francisco Bay area, where the bank has 14 branches.

"That's just not enough," he said. "The population is growing and it is a successful, affluent community. You don't want to miss the San Francisco market, but it is very well served by competitors."

On the other hand, Mr. Hartnack said, he is satisfied with the job his bank is doing in San Diego County, with a population of 2.7 million.

Union Bank has 14% of the branches there and an 18% market share.

"That says we are really pushing a lot of efficiency and we have enough of a presence that word of mouth keeps pushing a significant number of clients toward us," Mr. Hartnack said. "We are on prospective clients' radar screens."

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