Dime’s New Bag

Greetings, GonzoMongers. A story from the American Banker recently caught my eye. Dime Bancorp of New York has jumped headfirst onto the commercial banking bandwagon. Along with every thrift and savings bank in the country, Dime is “reinventing itself as a commercial banking company.” According to the American Banker, Dime’s goal is, with only modest loan growth, to “boost yields and increase margins by increasing its percentage of nonresidential loans from the current level of 51% to 65% or 70% within three years.” Within three years?! I really don’t think so.

While Dime is generally credited with a competent management team and is in the process of adding the necessary products and services to attract commercial customers – such as adding a real proof department and implementing a cash management system – such a dramatic transformation with only slight loan growth can not happen in just three years. Here’s why:

• Going Mano-a-Mano with the Big Boys – Operating in New York, Dime is trying to work C&I miracles in perhaps the most unforgiving, aggressive, brutally competitive commercial banking market in the country.
• Market Perception – Good or bad, a reputation is just damn hard to shake. Take the “Savings” out of the “Dime Savings” name if you want, but Dime won’t be the first place the local manufacturer thinks to go for his banking needs. (Speaking of the stickiness of reputations, in this case a good reputation, I talked with a woman the other day who is a lifelong friend of Shawn Eckhardt. You remember Shawn, the knuckle dragger who according to many “masterminded” the liquefying of snotty but talented ice queen Nancy Kerrigan’s knee with the business end of a police baton. Despite the slight transgression, my acquaintance noted that “Shawn really is a sweetie. He just got confused and misdirected.” But I digress…)
• Momentum – Even if the bank hires new and skilled commercial lenders, holds motivational pep rallies, and senior management really, really, really believes this can work, Dime will battle an enterprise-wide thrift mentality and pace that will be terribly difficult to crush in just three years.

Dime’s near-overnight transition to a commercial bank can happen. But not in three years. No way. -smh