Banking on a New Model

How City National’s new CEO is turning the institution around; using a rebranding campaign, and offering profitable, consumer-focused products and services

City National is also in the process of acquiring a Small Business Investment Company license from the Small Business Administration. The SBIC license would enable the bank to provide investment capital and technical assistance to entrepreneurs. “We want to be a better partner with the small business customer and help them better manage their business.”

But to accomplish all this, the bank must first move bad assets off its books as quickly as possible to stem further losses. To that end, management has increased personnel in its recovery and workout area to focus on collection-related transactions while looking for opportunities to sell foreclosed properties to hedge funds and other investors that buy distressed assets. “We want to reduce the number of non-performing loans to a minimum,” says Pinkett, “and get back into the business of looking for opportunities where we can make good loans to small businesses, to operating companies, to nonprofits that are improving communities, but doing it using what we learned in 2007–2008.”

While the bank is preparing for additional write-downs that will negatively affect the bottom line, Pinkett believes the bank will soon return to profitability. “We’re turning the corner—as much as we can see around the corner—but we still have a little bit more work to do before we can get back on a path of normalcy and profitability.”

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