In any language ... Thirty percent of county's institutions cater to immigrants.

There's not much good that came out of the 1992 Los Angeles riots, but they did give rise to some telling local banking lore.

For example, Ben Hong, then chief executive of the ethnic Korean Hanmi Bank, authorized his branch managers to offer generous terms to help those Korean-American merchants whose businesses had been damaged or destroyed so they could get back to business--even if they had little left as collateral.

In a megalopolis like Los Angeles, that's an example of the crucial role ethnic banks play in the county's many ethnic centers.

Indeed, 22 of the 75 insured commercial banks in Los Angeles County--30 percent--are ethnic banks, with combined assets of more than $38 billion. What's more, a dozen or so banks with headquarters in foreign lands have significant operations here.

And in a city of nearly 40 percent immigrants, ethnic banks, often organized by local civic and business leaders, have been crucial to immigrants working toward their America dream.

Most of the banks are predominately Chinese- or Korean-American focused, but there are also Japanese and one homegrown Hispanic bank, and a handful of de novo banks in the fund-raising stage. They target either a specific ethnic group or a multi-ethnic mix among Hispanic, Korean, Chinese, Cambodian, Indian and Middle-Eastern residents.

The driving force? It's the vast immigration that has transformed Los Angeles from a mostly Caucasian city into one of the world's most diverse metropolitan areas.

"The Korean and Chinese banks did, and continue to, benefit from a customer base that comes to the United States with a fair amount of wealth already," said Ed Carpenter, whose Irvine-based Carpenter & Co. has underwritten many banks in Los Angeles County. "These (other) communities also are densely concentrated, have a high preponderance toward savings and entrepreneurial activity (and) are very loyal to their local banks."

Seven of the largest ethnic banks--all either Korean- or Chinese-American--trade on the Nasdaq to generally positive reviews from Wall Street analysts. And the second largest homegrown bank in the county is East West Bancorp, a Chinese-American bank with more than $10 billion in assets.

But it's not as though ethnic banks don't face challenges--both locally and from afar.

For one, the constant drumbeat from Wall Street for greater profits runs up against the Asian bankers cultural inclination to be cautious and conservative.

The banks also face increasing competition from U.S. subsidiaries of their homeland's name-brand banks and from mainstream U.S. banks that try to hire away their staff to increase their multi-lingual banking services-and that's not to mention senior executives who sometimes leave to start their own banks.

Finally, for all their growth and prominence across the Los Angeles landscape, ethnic bankers complain they don't always get the respect they deserve.

"To a certain extent, we have become a mainstream bank," said East West Chief Executive Dominic Ng, noting that 60 percent of his commercial banking business is non-Chinese. "But in some quarters, especially in the public government and non-profit sectors, we're still considered a niche bank and we lose opportunities because of that."

Early Challenges

Chinese-American banks played a key role in the establishment of the city's ethnic banking sector, growing along with Los Angeles' Chinatown and the Chinese neighborhoods in the San Gabriel Valley that their loans helped develop.

Three years before the U.S. Immigration Act of 1965 opened the door to a wave of Chinese migration from Hong Kong and Taiwan, Cathay Bank, the region's first Chinese-American bank, was formed to serve the Chinatown community.

East West Bank opened its doors as a savings bank in 1973, but the Chinese banking community really didn't begin to take off until the mid 1980s, when the National Association of Chinese-American Bankers was formed to raise the profile and reputation of ethnic Chinese banks, particularly in Southern California.

"For a long time, we felt that ethnic Chinese banks weren't being treated as well as they could, by the public, by the banking industry and by the regulators in particular," said David Woo, a Los Angeles attorney who has represented Chinese American banks for 30 years. "So a group of us sat down in the mid-1980s and realized something had to be done to get more financial institutions into the Chinese community."

The association also drummed up investor interest in launching new banks, which coincided with a wave of Chinese investment in the Los Angeles area and the United States in the late 1980s.

Longtime Korea town business leader George Chey recalls it wasn't always easy in the early days either in the Korean community. For example, until the 1980s, Korean immigrants largely had turned to the local operations of Korea's state-owned Korea Exchange Bank, which was happy to take the deposits of immigrants, but tight-fisted when it came to small business loans.

Now chairman of Pan International Realty Inc., Chey was involved in several failed attempts to launch a local bank in the 1960s and '70s before Hanmi Bank launched with $5.5 million in its vaults in 1982. Now Hanmi Financial Corp., the bank has $3.6 billion in assets.

"The past efforts failed because not enough experience, not enough capital," said Chey, who served as Hanmi's chairman for years and retired from the board in May. "It took until 1980, when Chung Won Hun (the longtime president of Korea Exchange Bank) retired and said, 'Well, George, try again and I will help you.'"

Hanmi now competes with several locally owned and operated Korean-American banks, in addition to the U.S. operations of mainland Korean banks.

Woori American, a New York-based subsidiary of Korean megabank Woori Financial Group, opened a loan production office in Koreatown in 2005 and a retail branch next door earlier this year; it plans to open branches in Garden Grove and Buena Park next February. The parent company also operates an agency office with limited operations on Olympic Boulevard that provides international financing assistance for Korean companies such as Hyundai Motor Co. and Samsung Group.

"Nara (Bank), Hanmi and Wilshire State (Bank) may be very well known here in Los Angeles but not in Korea," said Brian Kim, general manager of the retail branch. "We see our market in serving Koreans who recently came here and are customers of Woori Bank in Korea or are familiar with it. That is our advantage."

Underserved communities

But not all immigrants have had the same success in building a local banking community as the Chinese and Koreans.

Despite the county's large Indian population, there's only one bank specifically targeting it: a U.S. subsidiary of State Bank of India. There are two Vietnamese American banks in Orange County, but none in Los Angeles. And plans to launch a bank catering to Los Angeles' Cambodian community area were recently announced, but only after talks had been underway for five years.

Even more striking: despite the county having the largest Hispanic population in the country, there is only one locally owned Hispanic bank (though big institutions such as Citigroup's Banamex and mainstream lenders such as Bank of America actively target the population.)

However, there's an effort underway to open some new local Hispanic banks, including Promerica Bank in downtown L.A., which has raised more than $27 million, and Americas United Bank in Glendale, which are in the process of raising money.

Promerica's formation has been led by Mafia Contreras-Sweet, a former state Secretary for Business, Transportation and Housing. At Americas United, it's been Gilbert Dalmau, who developed a Hispanic Banking Group for First Bank when he was president of its Southern California region.

"What needed to happen is that Hispanic leadership with sufficient wealth had to emerge with a view toward bringing banker teams together to serve the community," said Carpenter, whose company has underwritten local ethnic banks. He noted that it often takes immigrant groups until the second or third generation to gain the education and wealth to form their own banks. "I think Mafia's bank and Gil's bank stand excellent chances for success."

The only locally-owned Hispanic bank currently in business is East L.A.'s Pan American Bank, a small bank that since the 1960s has been controlled by Romana Banuelos, who was U.S. Treasurer during the Nixon Administration.

Mona Banuelos, her daughter and the bank's chief financial officer, said her mother has turned down numerous offers to buy the bank over the years. "My mom has always said competition is good, and she'd rather not sell the bank," said Banuelos, noting that her mother wanted to encourage additional banks in the community.

Indeed, the potential market for financial services catering to an ethnically diverse population has exploded. Los Angeles added 180,000 foreign-born residents in the 1990s, according to U.S. Census figures, so that by 2000 immigrants accounted for more than 40 percent of the city's population.

Mexico is by far the most common country of origin for Los Angeles' foreign-born residents at 41 percent, followed by 19 percent from Central American countries of E1 Salvador. Guatamala and Honduras. Five percent come from Korea and 2 percent from China, though the later figure doesn't include immigrants from Hong Kong and Taiwan.

Reaching out

Meanwhile, perhaps the ethnic banking community's biggest competition is coming from within itself. Experienced bankers have branched out and are behind the newest generation of local Asian banks, such as Mirae Bank in 2002 and Pacific City Bank in 2003.

"The start-ups tend to make for a difficult competitive environment because they'll offer (interest) rates that the older banks may be tempted to match or lose business," said Joe Gladue, an equities analyst who covers six L.A.-based ethnic banks for Cohen Bros. & Co.

Wilshire Bancorp, the parent of Wilshire State Bank, a predominately ethnic Korean bank, is taking a different approach. It has always had a multi-ethnic board, and is taking advantage of its experience with the Hispanic and African American neighborhoods adjacent to Koreatown to expand its business in those markets around the country. And while more than 80 percent of the retail business of the county's second largest ethnic bank, Cathay General Bancorp Inc., is to Chinese-Americans, 40 percent of its commercial leading is to what the bank considers the mainstream market.

Banks like East West are responding to competition by increasing their international trade business, offering non-Asian companies a door into China's economy and facilitating Asian companies looking to expand their presence here.

Ng last week returned from a nine-day business trip during which he opened the bank's first Asia branch in Hong Kong, visited its agency office in Beijing and dropped by the headquarters of several large customers.

"We are very well positioned for both the Chinese and mainstream middle market business," said East West Chief Financial Officer Julia Gouw. "As big as the Chinese business is going to be in California over the next 10 years, the size of that pie will only get so big. So by positioning ourselves as the bridge between East and West we will be able to tap into both markets for our future growth."

Staff reporter Howard Fine contributed to this story.

BY DEBORAH CROWE

Staff Reporter

City of Immigrants

The breakdown of L.A.'s foreign-born
population.

Mexico              41%
Central America *   19%
Philippines          5%
Korea                5%
Iran                 3%
Armenia              2%
China **             2%
Vietnam              1%
Other               22%

* El Salvador, Guatemala and Honduras

** Excludes Hong Kong and Taiwan

Source: Brookings Institute analysis of 2000 Census data

L.A.'s Federally Insured Ethnic Commercial Banks

                                             No.
Bank ticker             City               offices   Ethnicity

East West Bank (EWBC)   Pasadena             63      Chinese
Cathay Bank (CATY)      Los Angeles          45      Chinese
Hanmi Bank (HAFC)       Los Angeles          23      Korean
Chinatrust Bank/USA     Torrance             20      Chinese
Nara Bank (NARA)        Los Angeles          20      Korean
Wilshire State Bank     Los Angeles          19      Korean
(WIBC)
Far East National       Los Angeles          15      Chinese
Bank
Citibank/Banamex USA    Century City          1      Hispanic
Manufacturers Bank      Los Angeles           9      Japanese
Center Bank (CLFC)      Los Angeles          18      Korean
Preferred Bank (PFBC)   Los Angeles          11      Chinese
Mizuho Corporate Bank   Los Angeles           2      Japanese
Saehan Bank (SAEB)      Los Angeles           9      Korean
Mirae Bank              Los Angeles           4      Korean
First Commercial Bank   Alhambra              5      Chinese
EverTrust Bank          City of Industry      4      Chinese
Pacific City Bank       Los Angeles           2      Korean
State Bank of India     Los Angeles           6      Indian
Omni Bank               Alhambra              6      Chinese
First Standard Bank     Los Angeles           1      Korean
United Pacific Bank     City of Industry      2      Chinese
American Premier Bank   Arcadia               1      Chinese
First General Bank      Rowland Heights       2      Chinese
Asian Pacific           San Gabriel           2      Chinese
National Bank
Pan American Bank       Los Angeles           3      Hispanic

Bank ticker               Assets *

East West Bank (EWBC)   $10,013,253
Cathay Bank (CATY)        7,443,055
Hanmi Bank (HAFC)         3,621,311
Chinatrust Bank/USA       2,294,258
Nara Bank (NARA)          1,985,377
Wilshire State Bank       1,851,474
(WIBC)
Far East National         1,821,924
Bank
Citibank/Banamex USA      1,807,854
Manufacturers Bank        1,738,141
Center Bank (CLFC)        1,650,997
Preferred Bank (PFBC)     1,215,812
Mizuho Corporate Bank       647,491
Saehan Bank (SAEB)          535,459
Mirae Bank                  369,463
First Commercial Bank       337,492
EverTrust Bank              323,867
Pacific City Bank           310,291
State Bank of India         248,259
Omni Bank                   201,593
First Standard Bank         121,908
United Pacific Bank         108,941
American Premier Bank        79,425
First General Bank           74,424
Asian Pacific                52,283
National Bank
Pan American Bank            42,799

* in thousands