East-West Bancorp Inc Barclays 24th Annual Global Financial Services Conference
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Good afternoon, everybody. My name is Jared Shaw. I cover the mid-cap banks here at Barclays. We're excited to start the first mid-cap panel of our fireside chat of our conference, with Chris Del Moral-Niles from East West Bank, the CFO. Thanks a lot for coming.
My pleasure. Just informed me he's fresh off a transpacific flight.
So we appreciate you coming to East Coast time.
Yeah. It's always a great event, one that I've been delighted to participate alongside you Jared here for the last couple of years, and I look forward to many, many more in the years ahead.
Great. I will make sure everyone addresses Adrienne here in the front row, who I think you all know is Director of IR.
And with us today is also Chris Mattern, our Treasurer. We have been having good dialogue with folks all this morning and look forward to good dialogues over the next day or so.
Great. Thanks for a full lineup up until 5:30 P.M. every day.
We want to keep you busy, for sure.
Thank you. Great. Thanks. Well, at least kicking it off, East West remains differentiated through its exposure to both U.S. and Asian markets.
Yeah. As you look across the franchise today, what do you think continues to attract new customers on both the commercial and consumer side, and where are you seeing the strongest client acquisition opportunities?
Sure. We are a cross-border capable bank. It's important to recognize that 94% of our loans are in the U.S., and somewhere between 92% of deposits and 97% of dollar balances are in U.S. dollars. So we're a U.S.-centric bank that helps facilitate cross-border trade and activity for folks that have businesses and transactions due abroad. Focus is American. And within that, what's been very interesting use case is if you'd drawn a business bond map for where to build the perfect bank in the last 50 years in the United States, you probably would've picked a market like California. You probably would've zoned in further on Southern California. You would've zoned in further on a highly educated, entrepreneurial subset of that market, and that would've gotten you to the core East West client base.
That has been a great market to serve over the last 50 years. An even better market to serve, arguably, over the last 30. And it's been complemented, particularly over the last 15, by an incredible flow of activity across the Pacific, which has only become more and more diverse as we've grown. The reality is we are finding pockets to grow in our core Southern California markets, in our San Francisco, Seattle, Houston, Dallas, Boston, Atlanta, New York markets. We are finding pockets to grow in cross-border activity with Hong Kong. We're finding pockets to grow with cross-border activity with Shanghai. We're finding opportunities coming to us through our rep office in Singapore, and all of that is contributing to a better than average level of inherent organic growth than for most regional banks.
In part because they do not have that same exposure or density exposure to California, which continues to be very positive, and they do not have the added transactional flow of activity that we see from our cross-border activities, which is the incremental sort of fuel to the engine that we have. It is a very strong deposit engine. Where we have seen the growth, it is in deposits first and foremost. A derivative of that is in wealth, and both of those are fueled by those same demographic trends. High educational component, high income component, high wealth component, all of which driving higher savings balances and higher wealth activity. It is a very positive trend.
Yeah. Many banks talk about relationship banking, but East West seems to have an unusually sticky customer base. What do you think customers value most today, and how has that changed over time?
I think fundamentally, our customers value the stability and strength of East West Bank as a partner, and that stability strength has only continued to enhance itself here over the last several years. We recognize that the banks that we primarily compete against, and our primary competitors are the big four too big to fail banks. When we think about their presence, all of them have some presence in Asia at different levels for different reasons. But they are all there, and they are all doing things to support a variety of folks, whether it is the Walmarts or the folks that Walmart is buying from. They are all transacting Fortune 1000 level entities on both sides. But below the Fortune 1000, it is still those four banks and then East West Bank. That is where we know that we have a disproportionate opportunity to win share and capture market.
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