Will New Orleans’ Black Businesses Bounce Back?

A year after Hurricane Katrina, black entrepreneurs are still struggling

lunch to the menu.

Liberty Bank and Trust is one of the black-owned businesses that was hardest hit by the hurricane (see “Blown Away by Katrina,” November 2005). But Liberty (No. 7 on the BE BANKS list with $293.2 million in assets) has been able to successfully pick up the pieces.

“My company is having the most profitable year in its history,” says CEO Alden McDonald. “Katrina forced us to develop a new business plan that had to offset our losses. As a result, we have become more efficient.”

For the first six months of 2006, profits were $2.2 million — a 1.27% return on assets; pre-Katrina, the return was .85% to .87%. McDonald credits this increase to the restructured business model. Also, only four of nine banks are open, meaning less overhead and fewer employees. Surprisingly most of Liberty’s customers stayed with the bank through its Internet banking feature.

McDonald points out that not every black-owned business will be able to reopen immediately. “It’s going to take a while for the small black businesses to come back,” he says. “But you do have those businesses that are doing extremely well that have adjusted their product to meet the need of the new economy, such as real estate and construction.”

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