Charter one bank gift card

BANK ONE CONTINUES TO LOOM LARGE

In the fight for new customers, Chicago area banks this year have opened dozens of new branches locally, promoted the heck out of cheap home-equity rates and hyped free checking accounts.

So who's winning?

So far, it's Chicago's biggest bank, Bank One -- yes, the bank that once charged its customers to talk to its tellers, and heaped late penalties onto its better credit-card customers for being just a day late on payments.

In a market where hundreds of banks operate, Bank One's Chicago area bank deposits climbed to 20 percent of the total as of June 30 from 18.3 percent a year earlier. No bank has garnered 20 percent of Chicago deposits in at least the last 10 years, according to data released by the Federal Deposit Insurance Corp., which insures bank deposits.

Bank One, under its chief executive of nearly four years, Jamie Dimon, has boosted spending on advertising, opened new branches and extended branch hours, and offered all sorts of goodies to lure folks from competitors, such as paying them $50 or giving gift certificates to Home Depot or Amazon.com just for opening a checking account. He changed credit- card policies and amid public outcry got rid of the much-loathed $3 teller fee.

Ryan May, a 26-year-old clerk at the Chicago Mercantile Exchange, said he switched his accounts this year from Harris Bank and West Suburban Bank all to Bank One. Convenience won out for the Lincoln Park resident. He was drawn to Bank One because he can bank by phone, online "and the fact that they have a monopoly [of ATMs] at Walgreens," he said. "There's a Bank One at the Merc, I'm a block away from a Walgreens."

Two long-time large Chicago banks have lost market share, LaSalle Bank and Northern Trust. LaSalle, Chicago's second-largest bank based on deposits, had a market share of 12.1 percent this year, unchanged from the previous year but down from its five-year peak of 14.9 percent in 2000. Northern, which had 5.1 percent of local deposits five years ago, has shrunk every year, and in 2003 had 3.9 percent of deposits.

Large out-of-state banks like Cincinnati-based Fifth Third Bank, which bought Old Kent Financial in 2001, haven't yet been able to grow their market share, despite opening new branches and aggressive promotions on checking accounts and small-business lending. Its share of deposits fell to 2.9 percent from 3.1 a year ago. Northern Trust and LaSalle officials could not be reached for comment. Fifth Third did not return calls.

Cleveland-based Charter One, which bought St. Paul Bancorp, saw its market share dip to 2.89 percent from 3.07 percent the year before. Charter One's local president, Tony Sisto, said his bank has tweaked its offerings to customers this year: Potential customers who find a free checking account better than Charter One's will receive $500 to join Charter One, and new free checking customers who sign up for direct deposit get a $100 Master Card gift certificate.

"We're very happy with our growth," he said.

"It's one of the most competitive years, especially in an economic downturn," said Harris Bank President Frank Techar. His bank reversed its shrinking market share in 2003, with Harris topping 5 percent in the year ended June 30 on an 8.2 percent gain in deposits.

"We're delighted" about the progress, he said.

Bank One, though gaining customers and accounts, doesn't necessarily have Chicago locked down. A lot of newer competitors-- many large out-of-state banks--are quite pushy in getting into Chicago.

Bank of America will open 50 Chicago area branches by 2005. National City will more than double its branches to 75 in two years.

The 500-pound gorilla in this story is new to Chicago, Seattle- based Washington Mutual. The largest savings and loan in the U.S., it opened 85 bank branches this year after having only a handful of mortgage offices, an unprecedented push into Chicago.

When asked about Washington Mutual and other competitors, Bank One spokesman Tom Kelly said since Washington Mutual began opening branches in June, his bank branches "every month since July 1 have opened more accounts than we did in the month a year ago."