Seizing on what he called an “underserved market,” BET founder Bob Johnson opened his latest business venture Monday.
Urban Trust Bank will primarily target the District’s black community, Johnson said, and will provide loans to customers who have been denied at mainstream banks.
“Many African-Americans remain unbankable,” Johnson said at a news conference following Monday’s ribbon-cutting ceremony. “There’s still a failure on the part of the banking community to serve [the black community]. This is an opportunity to fill that gap.”
Johnson purchased the Orlando, Fla.-based Metro Bank in the spring, renamed the bank and moved it to Washington. The flagship branch is located in the heart of Washington’s business district at 1350 I St.
Johnson said that while much of the bank’s customer base won’t live near the flagship location, the hope is that word-of-mouth marketing will draw in customers from other parts of the city. Urban Trust plans to open a second branch in spring 2007 and several more throughout the city in the next several years, followed by branches in Maryland and Virginia.
Urban Trust is opening in an already competitive banking market, which includes a number of Washington-based banks that target the black community. Independence Federal, a largely black-owned bank that Johnson attempted to buy in 2003, primarily markets to blacks, as does Industrial Bank.
Targeting an “underserved” community is a marketing technique that may not translate into actual loans, said James Ballentine, director of community and economic development for the American Bankers Association.
“It’s a marketing technique that one can use if they’re trying to catch a marketplace, when in reality that may not be what’s actually occurring,” he said. “Whenever a new bank is opening, they will say there’s an underserved market. Washington, D.C., is not an underserved market. At the end of the day, the bank will do loans based on a variety of factors.”
However, attaching Johnson’s name to the bank may help pull in customers.
“Bob Johnson is unmistakably one of the greatest business leaders” Washington has seen, Ballentine said. “Having someone of that financial ilk is going to be great for that financial institution.”
