Financial Post, Duncan Mavin, 20 April 2007
Royal Bank of Canada's retail banking strategy in the United States is under attack at the corner of Alabama Highway 67 and Cedar Street.
A couple of weeks ago, local bank Superior Bancorp put up a billboard at the intersection on the edge of Decatur, Ala. -- population 53,929 -- where the giant Canadian intruder has just opened a branch.
"Sweet Home Canada," the billboard reads. But the word "Canada" is crossed out, replaced by "Alabama." And then the kicker: "It didn't sound right to us either."
Scott Custer, chief of RBC Centura, the bank's U.S. franchise, is not amused.
"What they are obviously trying to play on there is the Canadian connection," Mr. Custer said. "I have my own personal opinion on the tastefulness of that sign. I didn't really find it very funny or amusing, but maybe somebody did."
The billboard has been "very well received" by local people who have a strong affiliation to their state, said Tom Jung, an executive with Superior Bancorp, which has 26 branches Alabama and parts of Florida
"Whenever you have a new entrant to the market, you always think of how to combat it," Mr. Jung said. In the case of RBC, you tell potential customers the new bank is Canadian-owned, he said.
There are more than 9,000 banks in the United States and more than 90% of those are significantly smaller than the big Canadian banks.
The smallest U.S. banks operate out of only a handful of branches restricted to individual states or even specific counties.
"A lot of times, people don't really appreciate bigger banks coming in," said Jim Schutz, a bank analyst at Sterne Agee & Leach Inc. in Birmingham, Ala.
Many people in Alabama probably do not know RBC is Canadian, said Mr. Schutz, so Superior Bancorp's billboard strategy is smart because it points that out and plays to local sentiments that are opposed to big businesses from out of state.
RBC's Decatur branch is one of 39 bought from AmSouth Bank in March, a purchase which marked RBC's entry into Alabama. RBC Centura's Mr. Custer said the Alabama branches are on target to meet their business plan so far. "And that's far more important than what's on a billboard," he said.
RBC has its own advertising campaign to introduce the brand to Alabama "in what I would say is a much more positive way," said the Centura chief. He also said the bank's workforce in the state "is virtually 100% Alabama folks."
The bank's two Canadian rivals that have a retail presence in the United States have also recognized the importance of playing to local affiliations.
Bank of Montreal 's 202 branches in and around Chicago and Northwest Indiana, operate under the banner of subsidiary Harris Bank, retaining a link to a brand with 125 years of history.
Toronto-Dominion Bank's franchise in the northeastern United States is Portland, Me.- based TD Banknorth has been supported by a US$25-million marketing package.
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Royal Bank of Canada's retail banking strategy in the United States is under attack at the corner of Alabama Highway 67 and Cedar Street.
A couple of weeks ago, local bank Superior Bancorp put up a billboard at the intersection on the edge of Decatur, Ala. -- population 53,929 -- where the giant Canadian intruder has just opened a branch.
"Sweet Home Canada," the billboard reads. But the word "Canada" is crossed out, replaced by "Alabama." And then the kicker: "It didn't sound right to us either."
Scott Custer, chief of RBC Centura, the bank's U.S. franchise, is not amused.
"What they are obviously trying to play on there is the Canadian connection," Mr. Custer said. "I have my own personal opinion on the tastefulness of that sign. I didn't really find it very funny or amusing, but maybe somebody did."
The billboard has been "very well received" by local people who have a strong affiliation to their state, said Tom Jung, an executive with Superior Bancorp, which has 26 branches Alabama and parts of Florida
"Whenever you have a new entrant to the market, you always think of how to combat it," Mr. Jung said. In the case of RBC, you tell potential customers the new bank is Canadian-owned, he said.
There are more than 9,000 banks in the United States and more than 90% of those are significantly smaller than the big Canadian banks.
The smallest U.S. banks operate out of only a handful of branches restricted to individual states or even specific counties.
"A lot of times, people don't really appreciate bigger banks coming in," said Jim Schutz, a bank analyst at Sterne Agee & Leach Inc. in Birmingham, Ala.
Many people in Alabama probably do not know RBC is Canadian, said Mr. Schutz, so Superior Bancorp's billboard strategy is smart because it points that out and plays to local sentiments that are opposed to big businesses from out of state.
RBC's Decatur branch is one of 39 bought from AmSouth Bank in March, a purchase which marked RBC's entry into Alabama. RBC Centura's Mr. Custer said the Alabama branches are on target to meet their business plan so far. "And that's far more important than what's on a billboard," he said.
RBC has its own advertising campaign to introduce the brand to Alabama "in what I would say is a much more positive way," said the Centura chief. He also said the bank's workforce in the state "is virtually 100% Alabama folks."
The bank's two Canadian rivals that have a retail presence in the United States have also recognized the importance of playing to local affiliations.
Bank of Montreal 's 202 branches in and around Chicago and Northwest Indiana, operate under the banner of subsidiary Harris Bank, retaining a link to a brand with 125 years of history.
Toronto-Dominion Bank's franchise in the northeastern United States is Portland, Me.- based TD Banknorth has been supported by a US$25-million marketing package.
