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LIBERTY FINANCIAL COMPANIES: BANKS VIEW NON-TRADITIONAL PRODUCTS AS THE WAVE OF THE FUTURE FOR INDUSTRY PROFITABILITY

 LIBERTY FINANCIAL COMPANIES: BANKS VIEW NON-TRADITIONAL
 PRODUCTS AS THE WAVE OF THE FUTURE FOR INDUSTRY PROFITABILITY
 BOSTON, Oct. 19 /PRNewswire/ -- A new national study shows banks increasingly are selling non-traditional products to expand profitability and to become more competitive. Banks in the South and Midwest regions of the U.S., thrifts nationally, and larger bank holding companies are the most progressive in selling and marketing non-traditional products.
 The study conducted for Boston-based Liberty Financial Companies by Research & Forecasts, Inc. a New York based public opinion research firm, entitled: "Non-Traditional Banking Products -- The Wave of the Future," surveyed mid-level mangers and senior executives in banks, including bank holding companies, commercial banks and savings and loans institutions in four regions in the country -- Northeast, Midwest, South and West. Asset size ranged from $740 million to over $20 billion. The number of banks interviewed totaled 201.
 The feedback from respondents show non-traditional products are increasingly winning favor among banks as a means to increase profitability. Among the non-traditional products distributed by banks today, investment products predominate with: 55 percent of banks currently offering individual mutual funds, 44 percent of banks currently distributing discount brokerage services and 40 percent currently marketing financial planning services. Of insurance products most often sold by banks, 40 percent currently offer fixed annuities; 36 percent currently offer variable annuities and 19 percent distribute disability income insurance. Of these products being offered by banks, most have been distributed to existing retail customers. The commercial base of commercial customers remains untapped, and is therefore an important area for growth the banking industry.
 "The banking industry has found a way to capitalize on their existing retail customer base to increase profitability. They now need to focus on the enormous potential that exists with their commercial customer base. As they do, the competition into the 90s for commercial customers will be intense," said Kenneth R. Leibler, president and chief operating officer of Liberty Financial Companies.
 "As a third party provider to banking institutions across the country, we wanted to evaluate the current status of the market and predict trends for the future that will be useful for banks assuming a leadership position in the area of non-traditional products," commented Ronald S. Robbins, president of Liberty Financial Bank Group.
 Southern banks are leading the charge into the sale of non- traditional banking products, while banks in the Northeast are proving the most resistant to this new wave of banking. In addition, while many S&L's saw early advantage in providing insurance and investment products to their customers it is the larger bank companies that are most committed to the sale of these products in the near future.
 "Bank holding companies and larger commercial banks have the size and resources necessary to generate sales in this growing market," said Nicholas Tortorello, chairman of Research & Forecasts.
 According to the survey, two thirds (66 percent) of banks located in the south currently sell mutual funds, equal to those banks located in the Midwest, but greater than banks located in the Northeast (52 percent) or in the West (52 percent). In addition, Southern banks lead the pack in the sale of annuities, with half (50 percent) of the respondents selling these products. This compares to 44 percent in the northeast, 42 percent in the Midwest and 39 percent in the west.
 Management also plays a role in the sale and marketing trend of investment and insurance products. While most senior executives at banking institutions -- senior and executive vice presidents -- are strongly committed to the sale of these non-traditional products, middle mangers -- directors of marketing and vice presidents -- are much more skeptical about the roll-out and implementation of these programs.
 The Liberty Financial Companies national banking study -- "Non- Traditional Banking Products -- The Wave of the Future" reveals that mid to senior level bank mangers view non-traditional products as vital to sustaining their bank's profitability. For instance, 71 percent of banks expect their mutual funds sales to grow in the next 12 months, forecasting a median sales increase of 25 percent. However, since 80 percent of bank customers for insurance and investment products have come from within their banks' retail customer base, there exists opportunities ahead for banks to expand their customer base outside their normal customers. Interestingly, many banks believe they need to enlarge their customer base, but over half, 55 percent of banks, have not fully exploited the potential for these products both among competing retail customers or commercial customers.
 Liberty Financial Companies is a widely diversified financial services organization, with over $29 billion in assets under management. The Liberty Financial Bank Group, with more than $1 billion in product sales, is a leading full-service marketer and distributor of investment and insurance products to banking institutions across the U.S. Liberty Financial also operates several other operating companies including: Stein Roe & Famham Incorporated; Keyport Life Insurance Co.; Liberty Financial Bank Group, Liberty Asset Management Co. and Liberty Financial Real Estate.
 "Non-Traditional Banking Products -- The Wave of the Future" was commission by Liberty Financial Companies and conducted by Research & Forecasts, a New York-based public opinion research firm. The nationwide study is based on telephone interviews with 201 banks drawn from the Thompson Financial Directory, The interviews took place between Aug. 26 and Sept. 23, 1992. The margin of error for the total sample is +/-7 percent.
 The sample consists of 60 bank holding companies, 121 commercial banks, and 20 S&Ls. By region, there are 63 banks in the Northeast, 65 Midwest, 50 in the South and 23 in the West.
 -0- 10/19/92 R
 /CONTACT: William Rice of Liberty Financial, 617-722-0897; or Elliot Sloane, 212-715-1541, or Trina Chiara, 212-593-6373, both of Ruder Finn, for Liberty Financial/ CO: Liberty Financial Companies, Inc. ST: Massachusetts IN: FIN SU: ECO


TS -- NY044R -- 1701 10/19/92 14:20 EDT
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Date:Oct 19, 1992
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