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