BB&T Looks to Establish Long-term Relationships
April 2016
By David Zaslawsky
Photography by Robert Fouts
It may not seem like an important step, but a young person’s first banking experience might be taking out a car loan.
That is important to BB&T. “There is a good shot (that) wherever you get your first loan is where you maintain that relationship over a long period of time – unless the bank does something to mess it up, and that’s what we try really hard not to do,” said Guy Davis, market president for BB&T.
“We hope that loan creates a contact with that client, that we can begin the relationship,” he said. “Relationships in our world today are built around financial literacy; around financial planning. Clients that are financially healthy have more of an opportunity to be a better long-term customer.”
That car loan, whether for three, four, five or six years, can lead to a lifetime customer. “It’s an entry point for the consumer,” Davis said. “If you think back to the first time you borrowed money, it was probably either a car loan or credit card.”
The car loans are also low-risk for the bank, Davis said. He said that being delinquent on car payments is “usually the last thing” a consumer does. “It’s their transportation to and from work,” he said.
The bank offers car lease buyout loans, refinance and cash-out loans with some fixed rates as low as 7.39 percent for 24 months. Rates are subject to change.
“We’re doing a better job as an industry in making sure that we purpose each loan,” Davis said. “We know what each loan is for and structure the repayment in a way that it’s not detrimental to the client.”
He said that the bank won’t let a consumer get a car lease buyout loan for no longer than 24 months, “depending on what your needs are, because we want to match the purpose with the structure, and if you don’t, you really do a disservice to your client.”
Unlike an automaker, BB&T can “bank an entire consumer,” Davis said, “whereas they can only bank a part of the consumer. They can lend them money, but they don’t have other things to provide and other services to sell to that consumer. By pursuing the car loan piece we have an opportunity to bank that client long term.”
Of course, BB&T has plenty of rivals. “The reality is that this is one of the most competitive industries in the country and there are a lot of really good competitors,” Davis said. Most of the larger banks have departments that “focus primarily on calling on dealers to offer financing through those dealerships.”
What is the impact of BB&T’s car loans? “We feel like it works because when a client chooses through an auto dealer to do their car financing with us, then the branch closest to that client will generally make a phone call and say, ‘Welcome to BB&T. We’re glad to have you as a new client.’ That’s part of the process.”
Banks are careful not to be overly exposed to any industry, whether it’s car loans, commercial real estate or industrial lending. “We’re not trying to overgrow in one area to offset undergrowth in another,” Davis said.
Davis said that BB&T tries to “bank with the person as opposed to the line of business, and for us it’s all about starting that relationship somewhere. One of the things that I think we’re good at is integrating that process for the client and taking care of their holistic financial needs as opposed to just that one product.
“We don’t see ourselves as product-pushers. We see ourselves as bankers and as financial advisers. It’s only logical that we want to start that at the place that most people start their banking relationship.”
The overall lending environment is “steady,” Davis said. “It’s not robust, but it’s not slow. People in businesses are borrowing money. Whenever there is uncertainty in the economy, businesses tend to put off decisions for expansion until there is some certainty.” Yet because there has been so much uncertainty for so long, businesses “are starting to make this investment a little bit more,” he said.
